Dixons and Carphone Warehouse announce £3.8bn merger
Dixons Retail, the owner of Currys and PC World, and mobile phone retailer Carphone Warehouse have announced they are to merge in a deal worth £3.8bn.
The new firm will be known as Dixons Carphone, with ownership to be split equally between the two firms’ existing shareholders.
Dixons operates more than 500 Currys and PC World stores in the UK and Ireland.
Carphone Warehouse operates more than 2,000 stores across Europe.
The two firms disclosed in February that they were in talks about a tie-up.
Dixons chief executive Sebastian James announced the deal as he gave details of the firm’s trading performance for the financial year.
He said full-year underlying sales were up 3% and like-for-like sales, stripping out the effect of new store openings, were also up 3%.
Dixons said its full-year profit was expected to be “at the top end of market expectations” of £150m to £160m.
Mr James added: “Today we also announce that we are setting out on a new journey with Carphone Warehouse and it is good to be in such a strong position as we embark on this adventure.
“The ability to take what we have built in electrical retailing and add the profound expertise of Carphone Warehouse in connectivity would make us a leading force in retailing for a connected world.
“Together we can create a seamless experience for our customers that will enable technology to deliver what it promises – that is, to make their lives better.”
The merger will save the companies £80m a year from the 2017-18 fiscal year onwards, Dixons said.
“This is a very rare thing, a merger which is based on what is happening out in the world, rather than internal navel-gazing,” Mr James told BBC Radio 4’s Today programme.
He said the aim was to exploit the soaring number of devices connected to the internet, since Dixons sold them and Carphone Warehouse connected them.
For its part, Carphone Warehouse said “significant job creation” was expected as part of the deal, “resulting in an increase of approximately 4%”.
However, some existing staff will be affected. Dixons said there would be job cuts of 2% of the merged company, “as a result of the rationalisation of certain operational and support functions”.
Dixons Retail owns the Elkjop group in the Nordic region and the Kotsovolos retail business in Greece.
Last year, it sold its loss-making online retail business Pixmania to German industrial group Mutares.
It has also disposed of subsidiaries in Italy and Turkey, as part of its strategy of “focusing on markets where we are leaders”.