Carphone in £1.1bn deal to sell PCs, TVs
08 May 2008
Carphone in £1.1bn deal to sell PCs, TVs
UK-based mobile phone retailer the Carphone Warehouse is to sell 50 per cent of its European and US interests to consumer electronics shop Best Buy.
Carphone, which will make £1.1bn from the sale, will also go into business with Best Buy, expanding into the field of consumer electronics.
The UK retailer will contribute its 2,400 European stores under the Carphone Warehouse and Phone House brands as well as its share of its existing relationships with Best Buy.
Under the agreement, The Carphone Warehouse and Best Buy will each own 50 per cent of the retail business, comprising all the 2,400 stores, the web and direct businesses, the insurance operations, and airtime reselling businesses. Carphone will maintain 100 per cent control of its fixed line telecoms business in the UK, comprising TalkTalk, AOL Broadband and Opal; and its share of the Virgin Mobile France joint venture.
Carphone's existing European retail management team looks like it ill remain responsible for the day to day management of the new venture. But in due course, the team will be supplemented by additional personnel from Best Buy.
Charles Dunstone, Carphone's CEO, said, "We have been working closely with Best Buy for nearly two years, and it is clear that we have very complementary cultures, skills and assets - it's a perfect match. It is also clear that we have a significant opportunity for incremental growth in our retail business which we can best realise with Best Buy on board. 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."
Dunstone said his company plans to use the proceeds of the deal to pay down debt, invest in broadband customer growth and infrastructure, and invest in new areas of growth.
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