Dixons and Carphone Warehouse merge to exploit ‘internet of things’

Dixons Retail and Carphone Warehouse are hoping to create a ‘world class retailer for the new digital age’ after agreeing to a £3.8bn ‘merger of equals’.

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Dixons Retail is merging with Carphone Warehouse.

The new company will be called Dixons Carphone and will see the company split 50/50 between Dixons Retail and Carphone Warehouses shareholders. Carphone Warehouse boss Sir Charles Dunstone will be chairman of the new group, while Dixons boss Sebastian James will be chief executive.

Speaking on a call to announce the merger this morning, James says the deal is aimed at “creating an organisation relevant for the future” as connectivity becomes increasingly important. He believes the two firms are complementary to each other, with one focused on devices and the other on connectivity, creating a strong opportunity to come together to position for a “digital future”.

He highlights figures forecasting that 75 billion connected devices will be sold in the next three years, opening up a huge opportunity for Dixons Carphone to not only sell those devices but also the service that connects them to the internet.

“The world is changing incredibly fast and connectivity is at the heart of everything we do. The notion of a device unconnected is becoming irrelevant and a connection without a device is also irrelevant. These markets are converging and we as market leaders are converging,” he adds.

There will also be a strong focus in the new company on helping people set up their homes for this new connected future where people can control items from their fridges to their heating using their mobile phones, often dubbed the ‘internet of things’. James says there is increasing demand from customers for help in understanding this new technology and Dixons Carphone will focus on getting it into people’s houses earlier in order to build a long-term relationship with customers.

The news comes as Dixons announces its performance for the financial year, with like for like sales rising 3 per cent and total sales also increasing 3 per cent. Full year underlying profit is expected to be at the top end of the market at between £150m and £160m.

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