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Carphone Warehouse And Dixons To Merge

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Telegraph 6/5/14

'Carphone Warehouse and Dixons Retail are on the cusp of agreeing a near £4 billion merger to create a powerful UK retailer with 1,300 stores.

Cold water has also been poured on speculation around mass shop closures, although some outlets situated close together will inevitably have to close. Carphone Warehouse has almost 800 stores, predominantly on high streets, while Dixons, which more than 500 outlets in the UK and Ireland, generally trades from larger out-of-town stores.

The two companies were initially exploring Carphone Warehouse replacing Phones4u as Dixons’ in-store mobile phone and tablet computer specialist but the talks quickly developed into full-blown merger negotiations. Phones4u’s joint venture with Dixons will come to an end next year and the mobile phone company, which is owned by BC Partners, was reportedly trying to gate-crash a deal with Carphone Warehouse.

Spokesmen for Carphone Warehouse and Dixons Retail both declined to comment.'

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The word powerful seems somewhat misplaced.

It's one of those rare situations where it's probably a bad deal for both sides.

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It's one of those rare situations where it's probably a bad deal for both sides.

The money is in services (such as mobile 3G/4G contracts etc..) rather than the products themselves..Dixons have largely pulled out of the high st (and mainly located in out of town sites) so they'd have a high st profile again...A lot of stores have phones4u in them - which will be replaced with CW... They both sell similar things, such as tablets, so it'll give them better buying power..

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Yeah there is a fair bit of overlap between some of the product lines and no end to people wanting to see items physically before parting with their cash as highlighted by something I read recently about people 'webrooming' which is where people are browsing online and then preferring to buy in store even if slightly dearer.

I also work on a few online only web sites (no retail premises) that have benefited from the reverse, showrooming in the same markets as both Carphone Warehouse and Dixons which have slowly been losing sales in recent years so interesting times...

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Makes sense, The service in Carphone Warehouse used to be OK. Last couple of times I have been in there it had gone downhill, maybe not as bad as Dixons was but heading that way.

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So who is the larger because is there such a thing as a merger only takeover? I cannot think of a new name. I would go for Carphone as the bigger but have not checked the reports!

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To be called Dixons Carphone. I suppose that name is because this seems like a rare merger where partners are equal. Doubt it though but all rosy now.

Edit: going through the Telegraph detail Carphone is taking Dixons over.

Edited by Ash4781

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The merger will save the companies £80m a year from the 2017-18 fiscal year onwards, Dixons said.

...

He added that the merger should not result in any branch closures.

Above quotes are from the Dixons CEO in a beeb article. Wonder how they'll gain those savings then.

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I know the "Carphone" bit is a well-known brand, but since when did anyone have a carphone?!

car-phone-5.jpg

I had one of these in the 80s. The bulky bit lived in the boot but you could take it out and carry it with you if you were feeling strong. Good reception and range.

First-Car-Cell-Phone.jpg

post-11769-0-85757200-1400155712_thumb.j

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Gosh, what a rapier like and detailed financial analysis - you too should be a Negotiator.

Probably nearer reality than you realize. The management of large companies like dixons isnt dissimilar to how politicians run government. They just do things to make it look like theyre doing things. I put it to you this merger has no real merit, theyre simply out of growth ideas and hoping firing a few people might buy them (the management) another year or so.

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I don't doubt it is a poor idea, almost as bad as their buy back they did about five years ago - I agree that biz / gov. do anything, rather than something positive, rather like the post, a poor, futile attempt to justify ones existence.

Dixons (whatever they trade as ) share price fell 10%. I don't know if this is the deal was worse than expected but imagine alot of speculation on this as been in the media for a few weeks. Not sure about Carphone shares seem to fall 8%. Not convinced they are equal. Carphone is taking Dixons over.

If it's a lose-lose why are they merging ?

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