Carphone Warehouse And Dixons In Talks Over Merger

Electronics store Dixons and phone retailer Carphone Warehouse have confirmed that the two companies are in talks regarding a merger.

“The Boards of Dixons and Carphone Warehouse note the recent speculation and confirm that the two companies are in preliminary discussions regarding a possible merger,” a statement from the companies to the London Stock Exchange said.

The companies said that the discussions were at “a very preliminary stage” and that there is no certainty that any deal will take place, and that no decision has been reached regarding the structuring of any such merger.

Major force

A successful merger would create one of the biggest electronic device retailers in the UK market, combining two major players in the industry into one worth around £3.4bn.

Dixons is the UK’s second-largest electronics retailer, owning the Currys and PC World brands in addition to its own stores, totalling around 500 outlets in the UK and Ireland. It also owns shares in several European electronics retailers, including the Scandinavian Elkjop group and the Kotsovolos retail chain in Greece, and overall employs 31,000 people across 12 countries.

The company’s UK Currys and PC World stores do currently offer mobile phone deals, however this is through Carphone Warehouse’s competitor Phones4U, a deal which is expected to end if the merger goes ahead.

Formed in 1989 by Charles Dunstone, and Julian Brownlie, Carphone Warehouse is Europe’s largest independent mobile phone retailer, with over 2,000 stores across seven countries, and last year recorded turnover of £3.7bn.

The company was acquired for £1.1bn by Best Buy in 2008 as part of the US electronics giant’s UK expansion plans, with the deal leading to the creation of Best Buy Europe. Following the purchase, this company opened a series of eleven ‘big box’ out of town stores selling electrical goods in an attempt to compete with the likes of Dixons, but the scheme was a failure, with the operation closing down in January 2012

Carphone Warehouse also announced last month that it would be partnering with Samsung to open 60 dedicated stores, as the Korean manufacturer looks to compete with Apple’s stores. Between 10 and 15 of the shops are expected to be in the UK – with the rest in Ireland, Germany, Portugal, Sweden, the Netherlands and Spain.

The companies have until 5pm on 24 March to confirm whether the merger will go ahead.

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