A Chinese waitress helps U.S. Commerce Secretary Carlos Gutierrez put on a Home Depot smock at the Home Depot China announcement ceremony in Beijing December 13, 2006. [Reuters]

Home Depot established an office in China in 2004 to gain consumer insight and evaluate numerous strategies. It has been looking to set up stores in China at least since then.

"We have been waiting only because we had to make the right choice," said Verschuren.

Before the acquisition, it has had a sourcing industry in China with over 500 suppliers. Ten per cent of its products in the international market are from China.

"Through the acquisition, our strategy is to make a base and grow from there", said Verschuren.

Home Way, based in northern China's port city Tianjin, is the first home improvement retailer in China, founded in 1996 by entrepreneur Du Sha. "Home Way is a strong brand that is already established as a value and price leader among Chinese consumers," said Home Depot's Nardelli.

The communication between Home Way and Home Depot dates back to 1995, when the Chinese company sent its staff to the headquarters of Home Depot for training.

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