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Dixons and Carphone Warehouse Complete £3.8bn Merger

Written by: Keith Tully

Reviewed: Thursday 15th May, 2014

Electrical retailer Dixons and mobile phone retailer Carphone Warehouse have announced that they will be merging in a deal worth a reported £3.8bn.

The union is part of a plan to combine skill-sets and steal a march on competitors as technology continues to move towards electrical appliances that can connect and interact with mobile phones.

The new company will be named Dixons Carphone with ownership to be split 50/50 between the two firms' existing shareholders.

“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,” said Dixons chief executive Sebastian James.

“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.”

Mr James added that the merger would not result in any existing branch closures. At present, Dixons Retail operates more than 500 Currys and PC World stores across the UK and Ireland whilst Carphone Warehouse has more than 2,000 stores throughout Europe.

The merger has received widespread comment from business and technology experts with BBC Business Editor Kamal Ahmed of the opinion that the deal is all about positioning the new brand to be at the forefront of the marketplace over the next decade.

“In ten years' time, our phones will be connected to our fridges which can also speak to the washing machine or the oven. The best positioning, Dixons Carphone will claim, will be those retailers which sell the lot.

“The opportunities are clear: Carphone tends to have shops on High Streets, Dixons-owned PC World and Currys are in suburban and out-of-town sites. Carphone could also become a convenient central click-and-collect site for Dixons products.”

However, the merger has come in for some early criticism. Independent analyst Louise Cooper believes there is "much scepticism" that the merger would produce better growth, as claimed by both parties involved.

“Two past-their-sell-by-date retailers merging does not an Amazon make," she said.

 

*Carphone Warehouse image used freely in accordance with Creative Commons Attribution 2.0 Generic license.

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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