Home Depot buys a bank to improve its value chain

Filed in archive merger and acquisition on May 25, 2006

Bank Watch reported that Home Depot has recently bought a bank: Yes, that's true and the company has a reason for that.

This purchase is directly tied to facilitate the value chain for their customers. By making the contractor financing easier this will attract more business for the chain.

This approach is distinct in several respects. Consumers would get easy access to lenders who have specialized understanding of the home improvement market. Local contractors would no longer have to watch passively as consumers wrestle with issues relating to whether they will or won't be able to finance their projects. And the intervention of a reputable third party could alleviate frequent tensions between contractors and customers over the amounts and timings of payments.

Do you have other examples in mind (in other industries) when companies go for similar strategy?