Carphone Warehouse to buy out Best Buy in European JV for $730 mn

UK's mobile phone retailer Carphone Warehouse today said that it would buy out its joint venture partner Best Buy Co in a European mobile-phone venture, for £471 million ($730 million).

Carphone Warehouse and Best Buy, the world's largest consumer electronics retailer, held an equal 50 per cent stake in their 2008 joint venture Carphone Warehouse Europe (CPW Europe), which operates around 2,400 stores in nine European countries.

Under the deal, London-based Carphone Warehouse will pay £341 million in cash on completion of the proposed acquisition, while £80 million will be paid in stock and the balance £50 million in deferred cash consideration payable in two equal installments on the first and second year of completion.

CPW Europe is one of the largest independent European telecommunications retailers, with 2,377 stores, 13,000 employees and 2012 sales of £3.3 billion.

Carphone Warehouse said that following the sale of its US interest last year, it has become increasingly responsible for the day-to-day operations of CPW Europe while Best Buy has become more focused on their wholly-owned businesses.

''As a result, both parties have agreed that this is a good time for us to bring the joint venture to an end, whilst ensuring that our relationship remains in place by way of our global buying alliance,'' said Roger Taylor, CEO of Carphone Warehouse.

''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,'' he added.