16th May 2014 07:09
LONDON (Alliance News) - Carphone Warehouse Group PLC Friday said it has agreed to sell its 46% share in joint venture Virgin Mobile France to Numericable Group SA for EUR325 Million, following the announcement of its merger with fellow FTSE 250-constituent Dixons Retail PLC Thursday.
Numericable is a French telecommunications and broadband services provider, formed in 2007 by the merger of competitors Noos and NC Numericable Networks.
Carphone and all other shareholders of Omer Telecom Ltd, which is the holding company of the Virgin Mobile business in France, have signed an exclusivity agreement for the sale. However it is subject to approval from the French Competition Authority.
During the exclusivity period granted by the agreement, the shareholders and Carphone will carry out necessary consultations for the transaction.
The joint venture has been hampered by competition in the French market, and in Carphone's fourth quarter it saw its revenue drop 8.6%, as its contract customer base continued to decline. At the time of the company's half year results in November, it said that it remained committed to the Virgin Mobile France business.
On Thursday, Carphone announced that it had agreed to merge with Dixons Retail PLC in a GBP3.6 billion deal to form a new electrical goods and mobile phone retailer called Dixons Carphone PLC.
The companies said the aim of the deal is to cut the number of stores by amalgamating their electrical and phone stores into a joint offering, and to home in on the growing trend of connected devices, as smartphones become increasingly used to control everything from thermostats at home, to lighting and streaming music across homes. The companies also aim to roll-out the biggest click-and-collect network for technology products across the UK.
Shares in Carphone are up 2.1% at 307.70 pence at the open Monday, after falling by 8.1% on Thursday following the announcement of the merger with Dixons.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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