Home Depot Inc said on Tuesday it agreed to cut the price of its supply division sale to buyout firms by $1.8 billion, as a housing market drop and a credit crunch forced all sides to renegotiate.

As part of the new agreement, Bain Capital Partners, The Carlyle Group and Clayton, Dubilier & Rice will pay $8.5 billion for the division.

The move marks the first time a major private equity deal has been forced to lower its price since the leveraged buyout boom began roughly two years ago.

(Reporting by Martinne Geller; Additional reporting by Michael Flaherty in New York and Karen Jacobs in Atlanta)