(Adds industry context, details about Woolworths and Metcash...

(Adds industry context, details about Woolworths and Metcash stores)

SYDNEY, Aug 24 (Reuters) - Australia's top grocer Woolworths (WOW) put its shares on a trading halt on Wednesday ahead of an announcement on its home improvement joint venture.

Rival Metcash (MTS) also sought a trading halt on its shares pending an announcement regarding its participation in Woolworth's Home Timber & Hardware Group sale process.

A combined Metcash and Woolworths business could emerge as a stronger rival to Wesfarmers-owned Bunnings (WES), the undisputed king of hardware in Australia.

Woolworths is already battling a step-up in competition in its core supermarket business brought about by new entrants such as Aldi, contributing to its first loss in 23 years in February.

Last month, it announced a restructuring including job cuts and store closures. Woolworths is also looking to sell or wind up its stake in its loss-making hardware chain Masters.

Metcash already owns DIY hardware chain Mitre10 and most of its 400 plus stores are owned by franchisees selling outdoor furniture, garden tools and laundry appliances. ($1 = 1.3144 Australian dollars)