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Dixons and Carphone Warehouse announce £3.8bn merger | |
(35 minutes later) | |
Dixons Retail, the owner of Currys and PC World, and mobile phone retailer Carphone Warehouse have announced they are to merge in a deal worth £3.8bn. | |
The new firm will be known as Dixons Carphone, with ownership to be split equally between the two firms' existing shareholders. | The new firm will be known as Dixons Carphone, with ownership to be split equally between the two firms' existing shareholders. |
Dixons operates more than 500 Currys and PC World stores in the UK and Ireland. | 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. | Carphone Warehouse operates more than 2,000 stores across Europe. |
The two firms disclosed in February that they were in talks about a tie-up. | The two firms disclosed in February that they were in talks about a tie-up. |
Dixons chief executive Sebastian James announced the deal as he gave details of the firm's trading performance for the financial year. | Dixons chief executive Sebastian James announced the deal as he gave details of the firm's trading performance for the financial year. |
He said full-year underlying sales were up 3% and like-for-like sales, stripping out the effect of new store openings, were also up 3%. | He said full-year underlying sales were up 3% and like-for-like sales, stripping out the effect of new store openings, were also up 3%. |
Dixons said its full-year profit was expected to be "at the top end of market expectations" of £150m to £160m. | |
'Seamless experience' | |
Mr James added: "Today we also announce that we are setting out on a new journey with Carphone Warehouse and it is good to be in such a strong position as we embark on this adventure. | |
"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. | "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. |
"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." | "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." |
The merger will save the companies £80m a year from the 2017-18 fiscal year onwards, Dixons said. | |
"This is a very rare thing, a merger which is based on what is happening out in the world, rather than internal navel-gazing," Mr James told BBC Radio 4's Today programme. | |
He said the aim was to exploit the soaring number of devices connected to the internet, since Dixons sold them and Carphone Warehouse connected them. | |
For its part, Carphone Warehouse said "significant job creation" was expected as part of the deal, "resulting in an increase of approximately 4%". | |
However, some existing staff will be affected. Dixons said there would be job cuts of 2% of the merged company, "as a result of the rationalisation of certain operational and support functions". | |
Dixons Retail owns the Elkjop group in the Nordic region and the Kotsovolos retail business in Greece. | |
Last year, it sold its loss-making online retail business Pixmania to German industrial group Mutares. | |
It has also disposed of subsidiaries in Italy and Turkey, as part of its strategy of "focusing on markets where we are leaders". |