Carphone Warehouse and Dixons Retail today announced their plans to create “a world-class British retailer for the new digital age.”
The plan to create Dixons Carphone, whose value has been put at £3.8bn, envisages the creation of a leader in the European consumer electricals, mobile, connectivity and other related services. Carphone Warehouse brings experience of mobile and broadband technology, while Dixons, which operates brands including Currys and PC World , specialises in home electricals products from computers to cookers.
The two partners say the “merger of equals,” which is subject to shareholder approval, will help them save at least £80m a year, and also aspire to achieve integrated mobile retailing as a result.
Dixons chairman John Allan said: “This merger will create a new, world-class British retailer for the new digital age, with new opportunities for growth and greater scale and reach. Colleagues of both complementary businesses are experts in their fields, with a shared passion for technology, connectivity and brilliant service. Coming together when both companies are flourishing, we will create a strong business for our customers, colleagues, and shareholders, for now and the future.”
Carphone Warehouse chairman Sir Charles Dunstone said: “Both Carphone and Dixons have a huge commitment to delivering the consumer the very best service, product and advice around the connected world. We have a deep respect for each other and we see the merger of these two great companies as an opportunity to bring our skills together for the consumer and create a new retailer for the digital age. We are also creating jobs and we see many opportunities for further growth.”
The announcement came as Dixons issued a fourth quarter trading update, and said full-year underlying sales were up by 3%, while pre-tax profits were expected to be at the top end of expectations, at between £150m and £160m. UK like-for-like sales were down 2% in the fourth quarter, but Dixons said that at the same time last year sales had risen by 13%.
Sebastian James, chief executive of Dixons Retail, said: “This year we set out to achieve strong profit growth in our core business, and to tidy up the Group so that we are focused on those markets where we are winners. I could not be more pleased with the way it has turned out.”
He said the results put it in a strong position for its merger. “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,” he said.
“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.”
