Home Depot (NYSE: HD - News) has ruled out expansion in Europe, ending years of speculation that it could bid for Kingfisher, the UK-listed home improvement retailer.

Bob Nardelli, chief executive, said the fragmented nature of the market, restrictive planning regulations and sluggish economic growth were all factors weighing against investment in Europe.

"Europe is off the agenda. The answer on Kingfisher is no," he told the Financial Times.

Home Depot is known to have considered making a European acquisition in the past, with Kingfisher – owner of B&Q, Castorama and Brico Depot – considered the most likely target.

"It's not a reflection on Kingfisher because it is a good company," said Mr Nardelli. "But our focus right now is China and we still have lots of opportunities in North and Central America."

Home Depot, the world's largest home improvement retailer, has yet to open a store in China after two years of planning. It has held talks with potential Chinese targets, including Orient Home and Home World, but Mr Nardelli said he was prepared to wait for the right deal.

"I do not feel any pressure to do a bad deal that would burden this company for a lifetime," he said. "We looked at a couple of deals and they did not meet our criteria. We continue to look at both acquisitions and greenfield. When the day is right, we'll do it."

When Home Depot enters China, one of its biggest competitors will be B&Q, the biggest foreign DIY chain in the country with 48 stores and a further 21 in Taiwan and South Korea.

Home Depot's international reach is currently limited to about 200 stores in Canada and Mexico, representing 7 per cent of total revenues.

The company has been cautious about international expansion since a failed foray into South America in the 1990s. Mr Nardelli said he was open to opportunities elsewhere in Asia and Central America – but only if China proved successful. "If we get China right and demonstrate our ability to project internationally then we'll look where else we might go," he said.

Home Depot is counting on China to provide fresh growth as its domestic market matures. DIY retailing is growing at five or six times the US rate in China, as wealth and property ownership soars among the country's expanding middle class.

Bid speculation has intensified around Kingfisher this year following months of poor performance. Lowe's, the second-largest US home improvement chain, and private equity groups are among remaining potential bidders.