Best Buy UK Sells 50 Percent Stake in Best Buy Europe
April 30, 2013 1:44 PM
It will be sold to its partner Carphone Warehouse
Best Buy UK announced today that it will
sell its entire stake
in the Best Buy Europe joint venture.
Best Buy UK said it will sell its 50 percent stake in the Best Buy Europe joint venture with Carphone Warehouse. This equates to about £500 million ($775 million USD), which will be sold to Carphone Warehouse.
However, Best Buy UK will have to pay Carphone Warehouse £29 million ($45 million USD) in agreement termination fees.
"After reviewing the business and spending time with our partners, we concluded that the timing and economics were right to enter into this agreement with CPW," said Hubert Joly, president and chief executive officer of Best Buy. "This transaction allows us to 1) simplify our business; 2) substantially improve our Return on Invested Capital, one of the five pillars of our Renew Blue transformation; and 3) strengthen our balance sheet.
"Each international market is different and the sale of our European operations should not suggest any similar action in our other international businesses."
Shareholders still have to approve this deal. They are expected to do so by the end of June 2013.
Best Buy Europe's first store opened in May 2010, with about 11 stores launching across the UK. However, things started looking grim as the two companies decided to close the retail partnership just one year later due to an unprofitable year.
Now, it has been over a year since
Best Buy shut down
its retail stores throughout the UK.
Best Buy hasn't had a lot of luck in the U.S. lately, either. It has
axed thousands of jobs
over the past year alone, and even had to
find a new CEO
after a scandal arose concerning former CEO Brian Dunn's relationship with a female employee from the board.
Best Buy founder Richard Schulze even tried to
take the company private
last summer, and considered selling his 20 percent stake in the company as just one option.
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