The owner of Currys/PC World, Dixons Retail, and Carphone Warehouse have confirmed an all-share 'merger of equals', to capitalise on the growing digital market.
While the combined entity, to be known as Dixons Carphone, will continue to sell traditional products associated with each brand there will be a focus on capturing demand for mobile connectivity with electrical products in the home - the so-called 'Internet of Things'.
In essence, the group sees the mobile phone as a remote control for the household - able to operate items from ovens to audio systems.
It was estimated the 50/50 deal - subject to shareholder approval - would save the combined mobile phone to electricals group up to £80m annually from 2017/18 and value the firm at more than £3.7bn.
The two companies currently have almost 2,900 stores - 1,300 of them in the UK - and Carphone chairman Sir Charles Dunstone, who is set to become chairman of Dixons Carphone, confirmed he expected the deal to create jobs in the long term.
Growth of 4% in the combined group's workforce by the end of 2016 was forecast though the increase will be partially offset by the combination of operational and support function cuts, causing a 2% drop in total headcount initially.
Sir Charles said: "We are incredibly excited about the opportunity today's news brings to our organisations, our consumers and our investors.
"Both Carphone and Dixons have a huge commitment to delivering the consumer the very best service, product and advice around the connected world.
"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.
"We are also creating jobs and we see many opportunities for further growth."
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