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Kingfisher, which owns the B&Q retail chain, has agreed to sell Castorama Italy, its Italian home improvement business, for £440 million to French DIY chain Groupe Adeo.

Castorama, which has 31 Italian stores, and employs 2,200 people, made a profit of £29 million in 2007/08. Kingfisher also own Castorama stores in Poland and France.

Kingfisher chief executive Ian Cheshire commented: “We have built a successful and profitable business in Italy which now needs more capital to continue its development.”

He added: “We believe we can achieve higher incremental returns on capital elsewhere in Europe and strengthen our balance sheet by reducing out net debt.”

Kingfisher, which runs more than 800 home improvement stores across Europe and Asia, last week described trading conditions in the UK as "extremely tough" as it unveiled better-than-expected second quarter figures.

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