Best Buy yesterday said it is investing $2.1bn in Carphone Warehouse. Best Buy will buy a 50 percent stake in the established European retailer to help expand its worldwide consumer electronics business. The two will operate as equal partners.
Best Buy will pay $2.1bn for the stake in The Carphone Warehouse’s European and US retail business. The Carphone Warehouse operates 2,400 stores in Europe, and specialises in mobile-phone sales and services.
After completing the transaction, the companies will form a venture to establish new Best Buy stores and expand Carphone Warehouse's retail and online offerings, said a Best Buy spokeswoman. The companies will have an equal partnership in the venture, which is yet unnamed, the spokeswoman said.
Best Buy hopes to open new stores in 2009 under the Best Buy brand, with the first store in the UK, the spokeswoman said. Best Buy has 1,300 stores in the US, Canada and China.
Best Buy entered the Canadian and Chinese markets through acquisitions, the spokeswoman said. Best Buy bought Canadian consumer electronics retailer Future Shop in 2001, after which it was rebranded Best Buy Canada. In 2006, Best Buy acquired a 50 percent stake in Chinese retailer Jiangsu Five Star Appliance, for $180m, and established stores in China under the Best Buy brand.
Before Thursday's announcement, Best Buy owned a 2.9 percent stake in Carphone Warehouse, which helped Best Buy establish its mobile-phone sales presence in the US, the spokeswoman said.
The transaction is expected to be completed during Best Buy's fiscal second quarter, which ends August 30.