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Dixons and Carphone Warehouse agree £3.8 billion merger

Dixons Retail and Carphone Warehouse have announced that they have reached agreement on the terms of a £3.8 billion all-share merger.

GENERAL MERCHANDISE

Dixons and Carphone Warehouse agree £3.8 billion merger

Dixons Retail and Carphone Warehouse have announced that they have reached agreement on the terms of a £3.8 billion all-share merger.

With the new company to be known as Dixons Carphone, the merger will result in each of Dixons' and Carphone's shareholders holding exactly 50% of the business.

Under the terms of the merger, Dixons shareholders will receive 0.155 of a new Dixons Carphone share in exchange for each Dixons share.

Today the two companies said that they believed the combined group would be able to achieve integrated mobile retailing and procurement synergies, together with cost savings of at least £80 million on a recurring basis, which are expected to be delivered in full in the financial year 2017/18.

Following completion of the merger, current Carphone Warehouse chairman Sir Charles Dunstone will become the chairman of Dixons Carphone, while Carphone Warehouse deputy chairman Roger Taylor and Dixons retail chairman John Allan will become co-deputy chairmen.

The merger will also see Dixons chief executive Sebastian James become chief executive of the new business with Carphone Warehouse chief executive Andrew Harrison taking up the role of deputy chief executive.

The two companies announced in February that they were in talks about a possible merger. While Dixons operates 500 Currys and PC World stores in the UK and Ireland, Carphone Warehouse has more than 2,000 stores across Europe.

Today Dixons chairman John Allan said: "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. Coming together when both companies are flourishing, we will create a stronger business for our customers, colleagues and shareholders - for now and the future."

Carphone chairman Sir Charles Dunstone added: "We are incredibly excited about the opportunity today's news brings to our organisations, our consumers and our investors. We have a deep respect for each other and we see the merger of these two great companies as an opportunity to bring our skills together for the consumer and create a new retailer for the digital age.”

In a separate announcement, Dixons Retail revealed that both total and like-for-like sales rose by 3% on an underlying basis in the year to 30 April 2014. The company now expects its full-year underlying pre-tax profit to be at the top end of market expectations of £150 million to £160 million.

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