Best Buy Co. Inc. (Richfield, Minn.) will pay $2.1 billion for a 50 percent stake in The Carphone Warehouse Group Plc (London), Europe’s largest cell phone retailer. The Carphone Warehouse will place its 2400 U.S. and European stores in the new joint venture.
The deal also includes the web and direct businesses of The Carphone Warehouse, the insurance operations and its airtime reselling businesses.
Carphone Warehouse will continue as sole owner of its fixed line telecoms business in the U.K. – which includes TalkTalk, AOL Broadband and Opal – and its share of the Virgin Mobile France joint venture.
Carphone Warehouse said it would use the proceeds to pay down debt, invest in broadband customer growth, infrastructure and other areas. Its current European retail management team initially will remain in place, the companies said.
Carphone Warehouse ceo Charles Dunstone said the companies had been working together for two years. “It is clear that we have very complementary cultures, skills and assets — it’s a perfect match,” Dunstone said. “It is also clear that we have a significant opportunity for incremental growth in our retail business which we can best realize with Best Buy on board.”
The two companies worked on developing Best Buy Mobile, and have been collaborating to bring Geek Squad, a 24-hour computer support task force, to European markets.
“We believe our combined expertise has potential to result in significant financial upside as we together attempt to transform retail in Europe through the Carphone Warehouse, Phone House and Best Buy brands,” said Brian Dunn, president and chief operating officer.