Dixons And Carphone Warehouse Merger Agreed
The owner of Currys/PC World, Dixons Retail, and Carphone Warehouse have confirmed an all-share 'merger of equals' to capitalise on the growing digital market.
While the combined entity, to be known as Dixons Carphone, will continue to sell traditional products associated with each brand there will be a focus on capturing demand for mobile connectivity with electrical products in the home - the so-called 'Internet of Things'.
The group sees the mobile phone as a remote control for the household.
Sebastian James - the current CEO at Dixons Retail and chief executive-designate - told Sky News: "Today, most people are using the phone to control their audio systems and increasingly it will be security systems and lighting and heating and that's beginning already.
"I think we'll be the only people, together, who can really tell that story end-to-end for our customers."
It was estimated the 50/50 deal - subject to shareholder and anti-trust approval - would save the combined group up to £80m annually from 2017/18 and value the firm at more than £3.7bn.
The two companies currently have almost 2,900 stores - 1,300 of them in the UK.
The UK store portfolio would not be cut, they argued, because Currys/PC World stores were largely out of town while Carphone operations were concentrated on the high street.
Carphone chairman Sir Charles Dunstone, who is set to become chairman of Dixons Carphone, confirmed he expected the deal to create 1,680 jobs in the long term - taking the combined workforce to 43,500.
Sir Charles said: "We are incredibly excited about the opportunity today's news brings to our organisations, our consumers and our investors.
"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 City did not seem convinced by the merger on Thursday evening: Carphone Warehouse shares were down 8% while Dixons Retail shares were down 10%.