Retailers Carphone Warehouse and Dixons confirm £3.7 billion merger

Carphone Warehouse and Dixons are to merge in a multi-billion pound deal, they have confirmed.

Two of Britain’s biggest retailers are planning a massive all-share merger valued at more than £3.7 billion. Carphone Warehouse and Dixons Retail have confirmed that they plan to establish a combined group known as Dixons Carphone PLC that will be equally owned by the shareholders of each of the two companies.

The merged new brand will have a market capitalisation of close to £3.74 billion and allow the two firms to slash their combined costs by as much as £80 million every year.

Dixons is the company behind established brands Currys and PC World and owns 500 branches of the two stores across UK and Ireland. Combining this with more than 2,000 Carphone Warehouse stores across Europe, the new merged firm will enjoy a strong position in the retail market – the Financial Times reports Dixons Carphone is set to earn a place in the FTSE 100.

But the biggest advantage will come in combining the skills and expertise acquired about both companies. Applying Carphone Warehouse’s specialist knowledge of smartphones and connectivity to broader electronics expertise of Dixons should allow a merged business to serve a wider range of customer needs as the two markets come together.

“We operate in two complementary markets (mobile phones and consumer electronics) but they are markets that are converging,” Carphone chief executive Andrew Harrison told Reuters.

That is in no small part thanks to the development of the ‘Internet of Things’, which will mean more and more consumers looking to connect personal devices such as smartphones and MP3 players to appliances such as washing machines and ovens. It is hoped that Dixons Carphone will be an innovative company that is well placed to serve these emerging needs.

“This merger will create a new, world-class British retailer for the new digital age, with new opportunities for growth and greater scale and reach,” said Dixons chairman John Allan. “Colleagues of both complementary businesses are experts in their fields, with a shared passion for technology, connectivity and brilliant service.”