Best Buy (BBY) Pays $1.34B to Buyout U.S. Venture with Carphone Warehouse
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Best Buy's (NYSE: BBY) cellphone business in the U.S. is about to get a whole lot sturdier.
According to reports, Best Buy's U.K. cellular partner, Carphone Warehouse plc, said it will sell its stake in its U.S. cellphone joint venture to Best Buy for £838 million, or about $1.34 billion.
The move will end the two companies U.S. joint venture, and give Best Buy full control.
About 11 joint venture stores in the U.K. will also be shuttered.
Details from Carphone Warehouse: "Post completion, the assets of Carphone Warehouse will comprise a 50 percent stake in Best Buy Europe, which in turn will own the core European mobile phone retailing operations, CPW Europe, which trades principally under "The Carphone Warehouse" and "The Phone House" brands. Carphone Warehouse will also continue to hold a 47 percent stake in Virgin Mobile France, together with £125 million of cash and loans receivable as at September 30, 2011, freehold property valued at £74 million as at March 31, 2011, as well as its interest in Global Connect...Our current intention is to return up to £813 million of cash to shareholders via a B share scheme which will give shareholders the choice of receiving income or capital. Best Buy Europe will receive no further profit share from Best Buy Mobile US and Canada beyond September 2011. The Group's post-tax share of Best Buy Mobile profit share was £35 million for the year ended March 31, 2011 and £17m for the six months ended September 30, 2011. There were no gross assets associated with Best Buy Mobile on the Group's balance sheet at either date."
According to reports, Best Buy's U.K. cellular partner, Carphone Warehouse plc, said it will sell its stake in its U.S. cellphone joint venture to Best Buy for £838 million, or about $1.34 billion.
The move will end the two companies U.S. joint venture, and give Best Buy full control.
About 11 joint venture stores in the U.K. will also be shuttered.
Details from Carphone Warehouse: "Post completion, the assets of Carphone Warehouse will comprise a 50 percent stake in Best Buy Europe, which in turn will own the core European mobile phone retailing operations, CPW Europe, which trades principally under "The Carphone Warehouse" and "The Phone House" brands. Carphone Warehouse will also continue to hold a 47 percent stake in Virgin Mobile France, together with £125 million of cash and loans receivable as at September 30, 2011, freehold property valued at £74 million as at March 31, 2011, as well as its interest in Global Connect...Our current intention is to return up to £813 million of cash to shareholders via a B share scheme which will give shareholders the choice of receiving income or capital. Best Buy Europe will receive no further profit share from Best Buy Mobile US and Canada beyond September 2011. The Group's post-tax share of Best Buy Mobile profit share was £35 million for the year ended March 31, 2011 and £17m for the six months ended September 30, 2011. There were no gross assets associated with Best Buy Mobile on the Group's balance sheet at either date."
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