Australian-based public company and retailer Wesfarmers has agreed to buy Homebase from Home Retail Group for £340 million.

Wesfarmers currently already owns the Bunnings DIY chain in Australia, reports Logistics Manager.

Speaking on the acquisition, Bunnings managing director John Gillam said that it is "the first step in building a further growth platform for Bunnings with [an] additional planned investment of approximately £500 million in the Homebase team and assets to build a new Bunnings-branded business over three to five years".

John Coombe, chairman of Home Retail Group, added that once the sale of Homebase has gone through, the Board will continue to take over Argos and will look towards "options for delivering shareholder value".

The deal with Homebase could see Sainsbury's renew its bid for Home Retail Group, according to Logistics Manager. Similarly, Home Retail Group produced a document detailing the reasons why a takeover of Argos would suit its business model.

Reasons for this include optimising how combined retail space is used and combining delivery networks for deliveries in-store and to customer homes.