Merger talks for Dixons and Carphone Warehouse

A merger could be on the cards for Dixons Retail, owner of Currys and PC World, and Carphone Warehouse, who are engaged in talks on the possibility.

The discussions are at a preliminary stage and there is no certainty that a merger will occur. A deal structure is, so far, undecided on.

Dixons has over 500 Currys and PC World stores selling electrical goods including washing machines and smart phones in the UK and Ireland, while mobile phone seller Carphone Warehouse runs over 2,000 outlets across Europe.

Shares in both Dixons (up 7.5 per cent) and Carphone Warehouse (up six per cent) shot up on news of the merger talks.

Both retailers performed well over the last three months of 2013. Dixons reported like-for-like sales in the UK and Ireland up five per cent in the three months to 4 January, which may have been boosted by the failure of its competitor Comet. Carphone Warehouse has seen a three per cent increase in like-for-like sales to 28 December.

The Takeover Panel will require the companies to announce their plans to make an offer by 5pm on 24 March.

Retail analyst Nick Bubb told the BBC: “In a world of connected devices, Dixons is underexposed to the key area of mobile/smartphone retailing, and it is known that they were looking at the area.

“It is a bold move for Dixons; it is slightly harder at this stage to see what’s in it for Carphone."

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