U.S. retailer Best Buy is buying a 50 percent stake in an established European retailer to expand its worldwide consumer electronics business, the company said Thursday.
Best Buy will pay US$2.1 billion for the stake in The Carphone Warehouse's European and U.S. retail business. The Carphone Warehouse, which is based in the U.K. and operates 2,400 stores in Europe, specializes 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 U.K., the spokeswoman said. Best Buy has 1,300 stores in the U.S., 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 $180 million, 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 U.S., the spokeswoman said.
The transaction is expected to be completed during Best Buy's fiscal second quarter, which ends Aug. 30.