Best Buy Splits with Carphone

Best Buy Co. Inc. (Richfield, Minn.) is selling its stake in its European joint venture to partner Carphone Warehouse Group Plc (London) in a cash-and-stock deal valued at about $775 million.

The deal ends a five-year partnership, begun in May 2008 when Best Buy paid nearly $2 billion to make the European joint venture the centerpiece of its international expansion plans.

Both retailers said they would now be able to concentrate on their main markets.

“This transaction allows us to simplify our business, substantially improve our return on invested capital and strengthen our balance sheet,” said Best Buy ceo Hubert Joly, though he insisted that pulling out of this deal did not necessarily mean Best Buy would abandon its international ambitions elsewhere.

“For us, the transaction will simplify our ownership structure, streamline management decision-making and give us full ownership of our growth opportunities across Europe and other markets around the world,” said Carphone ceo Roger Taylor.

Carphone owns 2400 stores in nine European countries. It opened 11 American-style Best Buy electronics megastores in Britain, but closed them in 2011 after significant losses.