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| Dixons and Carphone Warehouse in merger talks | Dixons and Carphone Warehouse in merger talks |
| (about 1 hour later) | |
| Dixons Retail, the owner of Currys and PC World, and mobile phone retailer Carphone Warehouse have said they are in talks over a possible merger. | Dixons Retail, the owner of Currys and PC World, and mobile phone retailer Carphone Warehouse have said they are in talks over a possible merger. |
| The companies said the talks were at a very early stage and there could be no certainty a merger would take place. | The companies said the talks were at a very early stage and there could be no certainty a merger would take place. |
| They also said no decision had been made on how a deal might be structured. | They also said no decision had been made on how a deal might be structured. |
| Dixons operates more than 500 Currys and PC World stores in the UK and Ireland. Carphone Warehouse operates more than 2,000 stores across Europe. | Dixons operates more than 500 Currys and PC World stores in the UK and Ireland. Carphone Warehouse operates more than 2,000 stores across Europe. |
| Dixons Retail also owns the Elkjop group in the Nordic region and the Kotsovolos retail business in Greece. | Dixons Retail also owns the Elkjop group in the Nordic region and the Kotsovolos retail business in Greece. |
| Shares in both companies jumped on news of the merger talks. Dixons Retail climbed 7.5%, while Carphone Warehouse was up 6%. | |
| The two companies said: "The boards of Dixons and Carphone Warehouse note the recent speculation and confirm that the two companies are in preliminary discussions regarding a possible merger of Dixons and Carphone Warehouse. | The two companies said: "The boards of Dixons and Carphone Warehouse note the recent speculation and confirm that the two companies are in preliminary discussions regarding a possible merger of Dixons and Carphone Warehouse. |
| "These discussions are at a very preliminary stage and there can be no certainty that a transaction will be forthcoming. No decision has been reached regarding the structuring of any such merger." | "These discussions are at a very preliminary stage and there can be no certainty that a transaction will be forthcoming. No decision has been reached regarding the structuring of any such merger." |
| Dixons recently reported strong Christmas trading, with like-for-like sales in the UK and Ireland up 5% in the three months to 4 January. The company has benefited from the demise of its competitor, Comet. | Dixons recently reported strong Christmas trading, with like-for-like sales in the UK and Ireland up 5% in the three months to 4 January. The company has benefited from the demise of its competitor, Comet. |
| Carphone Warehouse reported like-for-like sales up 3% in the three months to 28 December. | Carphone Warehouse reported like-for-like sales up 3% in the three months to 28 December. |
| Phones4U, Carphone Warehouse's rival, has a partnership with Dixons, and offers mobile phones to customers at PC World and Currys. | Phones4U, Carphone Warehouse's rival, has a partnership with Dixons, and offers mobile phones to customers at PC World and Currys. |
| Consolidation trend | |
| Maureen Hinton, retail research director at Conlumino, said a merger would be a "good deal" for both companies as they were in "very competitive" sectors. | |
| She said the retail industry was changing, as online shopping now accounted for a "much greater share" of the market. | |
| "Quite a lot of players have left the market as they just can't survive," she added. "It just seems consolidation is the best way to go." | |
| However, consolidation could be worse news for consumers, she said, if it meant there were fewer firms in the market competing over price. | |
| Regulation to prevent a monopoly of the mobile phone market could follow at a later stage, should this be the case, she added. | |
| Independent retail analyst Nick Bubb said: "In a world of connected devices, Dixons is underexposed to the key area of mobile/smartphone retailing, and it is known that they were looking at the area. | |
| "It is a bold move for Dixons; it is slightly harder at this stage to see what's in it for Carphone." | |
| The companies, as required by Britain's Takeover Panel, will have to announce their intention to make an offer by 24 March. |