LONDON Oct 10 Dixons Retail, Europe's
second-biggest electrical goods retailer, has agreed to pay 25
million euros ($34 million) to merge its loss-making UniEuro
business in Italy with a firm controlled by private equity group
Dixons' plan is to focus on markets where it has a leading
position and combined stores and internet business, such as the
UK, Nordics and Greece.
Last month the firm, home to the Currys and PC World chains
in Britain, Elkjop in Nordic countries and Kotsovolos in Greece,
struck deals to sell its loss-making French e-commerce business
PIXmania and Turkey's ElectroWorld, leaving Italy as its
Dixons said on Thursday it had signed a deal with the
shareholders of SGM Distribuzione, which trades as Marco Polo in
Italy, to form a new company that will own both UniEuro and
Marco Polo, sending its shares up 4 percent.
Rhône Capital is the controlling shareholder of Marco Polo
and will become the controlling shareholder of the new merged
company. In total the owners of Marco Polo will own 85 percent
of the merged business, while Dixons will own 15 percent.
Dixons said it would provide 25 million euros of cash to the
new business and invest up to 10 million euros in it in the form
of a loan note. The merged business will trade from 173 owned
stores as well as through a number of franchise partners.
UniEuro made a pretax loss of 4.1 million pounds ($6.53
million) in the year to April 2013, on sales of 516 million
Dixons said the deal, anticipated to close at the end of
November, was expected to be accretive to underlying earnings in
its 2013-14 financial year.
Commenting on the Italy, Turkey and PIXmania deals, Dixons
Chief Executive Seb James said: "I have no doubt that this
increased simplicity and clarity will enable us to deploy our
resources better and drive better value for all of our
Shares in Dixons, which have more than doubled over the last
year, were up 1.8 pence at 45.9 pence at 1230 GMT, valuing the
business at 1.68 billion pounds.