Carphone Warehouse and Dixon merger nears finalisation

Carphone Warehouse and Dixons Retail are on the verge of agreeing a merger deal that would create a formidable retailer in Britain with 1,300 stores.

An announcement on the deal is expected around 15 May, the date that Dixons is due to publish its full-year trading results. It is thought that together the companies would be worth £3.7 billion.

Preliminary talks between the pair were confirmed in February, and in March they had to request an extension from the Takeover Panel to pin down the details of a merger. A deadline of 5pm 19 May has been imposed for the announcement of an agreement.

Carphone Warehouse’s founder Sir Charles Dunstone is to become the chairman of the enlarged group, which is expected to be called the Dixons Carphone Group plc. Roger Taylor, deputy chairman of Carphone Warehouse, and John Allan, chairman of Dixons, will be deputy chairmen of the new group.

The deal could face criticism from other retailers over the strong, united front of the businesses, but since there is little overlap between the product offerings sources are confident the deal will go ahead, though this also means limited cost saving opportunities.

News of the merger nearing a conclusion will leave Phones4U out in the cold. It had been attempting to gatecrash the deal to preserve its existing mobile phone retailing arrangement with Dixons.

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