In a world of consolidation perhaps we should have seen this coming...
Monster US consumer electronics retailer has just bought a 50 per cent share in European and US retail interests in fellow highstreet giant the Carphone Warehouse for a whopping £1.1bn ($2.1bn).
According to the (fairly complex) breakdown, upon completion of the transaction, the Carphone Warehouse and Best Buy will each own 50% of the retail business, comprising all the 2,400 stores, the web and direct businesses, the insurance operations, and its airtime reselling businesses. The Carphone Warehouse continues to own 100% of its fixed line telecoms business in the UK, comprising TalkTalk, AOL Broadband and Opal; and its share of the Virgin Mobile France joint venture. Best Buy continues to hold its 2.9% stake in the Carphone Warehouse. *Head spins*
Charles Dunstone, CW CEO, said, "We have been working closely with Best Buy for nearly two years and it is clear that we have very complementary cultures, skills and assets - it's a perfect match. It is also clear that we have a significant opportunity for incremental growth in our retail business which we can best realise with Best Buy on board… we bring local knowledge, infrastructure and the expertise in linking services to product: that should help them push into larger format consumer electronics retailing in Europe."
"Both companies could have pursued their goals individually," said Brad Anderson, Vice Chairman and CEO of Best Buy. "However, we believe that we can collapse time, increase our success with consumers and create more shareholder value for both companies by pursuing our goals together."
So a monster has been born from two already monolithic companies. Who's going to buy who next to keep up? Watch this space…