Dixons Retail and Carphone Warehouse have confirmed that they are to merge in a deal worth £3.8 billion.
The parent firm of Currys and PC World and the mobile phone outlet will split ownership of the newly created firm, which will be known as Dixons Carphone, equally between their existing shareholders.
The firms originally revealed that they were in talks regarding a merger in February. PCR confirmed the deal in late April, with a source close to the talks revealing the merger was ‘as good as complete’.
Dixons CEO Sebastian James announced the deal alongside the company’s financial results, revealing that sales were up three per cent and forecasting total annual profit to be between £150 to £160 million.
“Today we also announce that we are setting out on a new journey with Carphone Warehouse and it is good to be in such a strong position as we embark on this adventure,” said James.
"The ability to take what we have built in electrical retailing and add the profound expertise of Carphone Warehouse in connectivity would make us a leading force in retailing for a connected world.
"Together we can create a seamless experience for our customers that will enable technology to deliver what it promises – that is, to make their lives better."
The deal is predicted by Dixons to save up to £80 million from 2017–18 onwards, and would not result in the closure of any stores, meaning that the new Dixons Carphone company will operate out of around 2,900 stores across Europe – with 1,300 of them in the UK.
Carphone Warehouse added that it expects "significant job creation" of approximately four per cent following the merger, with Dixons detailing that there would initially be job cuts of two per cent "as a result of the rationalisation of certain operational and support functions".
The deal has resulted in several job changes for executives of each firm: Sir Charles Dunstone, chairman of Carphone Warehouse, will become the chairman of Dixons Carphone; Roger Taylor, deputy chairman of Carphone Warehouse, and John Allan, chairman of Dixons will become co-deputy chairmen, with Allan additionally becoming senior independent director.
Sebastian James, CEO of Dixons, will become CEO; Andrew Harrison, CEO of Carphone Warehouse, will become deputy CEO; Humphrey Singer, CFO of Dixons, will become CFO; Katie Bickerstaffe, CEO of UK and Ireland Dixons, and Graham Stapleton, CEO of UK and Ireland Carphone Warehouse, will join the Dixons Carphone board as executive directors and retain their current responsibilities.
Dunstone said: "Both Carphone and Dixons have a huge commitment to delivering the consumer the very best service, product and advice around the connected world.
"We have a deep respect for each other and we see the merger of these two great companies as an opportunity to bring our skills together for the consumer and create a new retailer for the digital age. We are also creating jobs and we see many opportunities for further growth."
Allan added: "This merger will create a new, world class British retailer for the new digital age, with new opportunities for growth and greater scale and reach.
"Coming together when both companies are flourishing, we will create a stronger business for our customers, colleagues and shareholders – for now and the future."
Market analysts previously commented that the deal could mean tougher stock negotiations for PC vendors and distributors, due to the combined power of two of the UK’s largest technology firms.