Best Buy to acquire The Carphone Warehouse in £1 billion deal

Source: Technology Digital

Date :08/05/2008 11:19:08

The Carphone Warehouse Group Plc has agreed to sell 50 percent of its retail interest to US company Best Buy Inc. for £1.1 billion.

The newly-formed company will capitalize on the European consumer’s appetite for consumer electronics and will comprise The Carphone Warehouse’s existing business, operating from more than 2,400 stores in nine European countries.

Best Buy is a consumer electronics retailer with 1,314 stores in the USA, Canada and China, employing 150,000 people, and with an operating income of $2.2 billion.

On completion of the transaction each company will own 50 percent of the business, comprising all the 2,400 stores.

Market growth

Consumer electronics has been the fastest-growing category in European retail over the past five years, representing a market of approximately £89 billion. The two companies expect growth in the market to be led by the convergence in entertainment, computing and communications.

The Carphone Warehouse plans to use the proceeds of the transaction to repay existing debt, to invest in broadband customer growth and infrastructure, and to invest in new areas of growth.

Charles Dunstone, CEO of The Carphone Warehouse, said, “Best Buy brings demonstrable expertise in merchandising, sourcing and customer service: that should help us accelerate the evolution of our business towards the broader connectivity market. We bring local knowledge, infrastructure and the expertise in linking services to product: that should help them push into larger format consumer electronics retailing in Europe.”

The transaction is expected to close during Best Buy’s fiscal second quarter, which concludes on August 30, 2008.

May 08, 2008