After 40 years operating on its own steam, Magnet Mart is merging with John Danks and Sons, a subsidiary of the Woolworth/Lowe’s home improvement joint venture.

It will become part of the Danks chain of hardware stores, which will supply and support Magnet Mart.

Major redevelopment plans for the local store remain firmly on the agenda.

But Magnet Mart chairman Paul Donaghue said the timing of the merger had nothing to do with the Wesfarmers owned Bunnings’ buyup of south Goulburn land for a store opposite the Big Merino last month.

“We have been dealing with Bunnings for 12 years in Canberra,” he said.

“We have been negotiating with Danks for quite some time. Bunnings buying up land in Goulburn is a real reason to do what we’re doing, but it wasn’t the motivator.”

Magnet Mart operates in the ACT and Southern Highlands where it has five stores, including one in Sloane, St Goulburn and another at Bowral. The business employs 300 people, 25 of whom work at Goulburn.

Mr Donaghue said Magnet Mart would sit within the Danks portfolio and be a part of its corporate stores, which are under development.

The Danks offer will help even out what Mr Donaghue describes as an “uneven playing field.”

“Everything has a timeframe,” he said of the reasons for the merger.

“We have been in business for 40 years as a private company and things have changed a heck of a lot.

Blind Freddy can see there’s a large imbalance in the hardware industry.

“Bunnings has well over a 50pc share and that’s not healthy for the industry or the consumer. Another large player coming in to offset that is what the industry needs.”

Mr Donaghue said the merger would provide access to a deeper team and the wholesaling and marketing resources of a bigger group to help support and grow his business further.

While he’d had many offer to buy some or all of the business this was the first bid to merge all of the company.

“Really, we can’t compete in the medium term and strategically, this is the right move,” he said. Jobs at the Goulburn store are secure.

The chairman committed to going ahead with redevelopment plans, but in a slightly different form. Magnet Mart has had plans before Goulburn Mulwaree Council since April 2007 to double its internal floor space to 5000 square metres.

It was to take in the rear of an adjoining two-storey residential building and the former Southern Ford service site, both of which Mr Donaghue owns.

But traffic and parking issues and planners awaiting further information had held up the DA.

Mr Donaghue told the Post he had withdrawn this application and met with Council last week about new plans.

He declined to go into to detail, only to say it would be very modern and include a larger hardware section. The Magnet Mart name will remain at least for the “medium term” and Mr Donaghue hopes it will stay long into the future.

He will act as an advisor to Danks and will continue to be involved with Magnet Mart. Construction of the Bunnings store is expected to begin next year.

Real estate agent Greg May told the Post recently that the chain planned to lodge a development application before Christmas.