Dixons and Carphone Warehouse to Merge
After announcing in February that they were in talks about a possible merger, Dixons Retail and Carphone Warehouse have now said that it is actually going to happen in a deal worth around £3.8 billion.
Dixons Retail, which is the owner of electronics companies Currys and PC World, and mobile phone retailer Carphone Warehouse will be combining to make one company called Dixons Carphone, with ownership evenly split between the two firms’ existing shareholders.
There are more than 500 Dixons-owned stores in the UK and Ireland and a further 2,000 Carphone Warehouses dotted around Europe – this means that Dixons Carphone will have more than 1,000 stores in the UK alone. The merger should also not affect existing stores, in that there are no planned branch closures, and the companies could save around £80 million per year from the 2017-18 tax year onwards.
“We are setting out on a new journey with Carphone Warehouse in connectivity, which would make us a leading force in retailing for a connected world,” announced Dixons Retail’s Chief Executive Sebastian James. “Together we can create a seamless experience for our customers that we enable technology to deliver what it promises, that is to make their lives better.”
Mr James explained that more and more people are using their mobile phones for a wider variety of uses, such as controlling their audio systems, and he feels that it won’t be long before phones will be incorporated with security systems, as well as lighting and heating controls, as standard. “I think we will be the only people, together, who can really tell that story end-to-end for our customers,” he said.
He added that the merger is a way of exploiting a market that circles around devices connected to the internet, as Dixons sells such devices and Carphone Warehouse connects them, creating the ultimate electronics business.
Carphone Warehouse’s chairman and founder, Sir Charles Dunstone, said that both companies have immense respect for each other, and see the deal as a way of combining their skills for the best of the customer, and “create a new retailer for the digital age”. He added that more jobs could also be created, as well as opportunities for further growth in the future.
“We are incredibly excited about the opportunity [the deal] brings to our organisations, our consumers and our investors,” he said. “This is a new chapter for both businesses and we are energised and proud to be a part of what will be another fantastic journey for consumers and shareholders.”