The transaction is expected to complete by June this year
US electronics retailer Best Buy has agreed to sell its 50% stake in European joint venture (JV) to the UK-based telecommunications retailer Carphone Warehouse Group (CPW) for £500m.
The JV, dubbed Best Buy Europe, was formed in June 2008 and operates 2,400 stores in eight European countries.
As per the deal, Best Buy will receive £420m in cash and £80m in Carphone Warehouse stock, subject to a 12-month lock-up restriction.
Best Buy has also agreed to pay £29m to satisfy existing agreements, including the parties’ Global Connect partnership, which will end at closing.
The company said it expects to report a charge of about $200m in the first quarter of fiscal 2014 associated with accumulated foreign currency translation losses that will be written off at the time of closing.
Best Buy president and chief executive officer Hubert Joly said the transaction will allow the company to simplify its business, improve return on invested capital and strengthen 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," Joly said.
Carphone Warehouse chief executive Roger Taylor said the transaction will simplify the company’s ownership structure, streamline management decision-making and give full ownership of its growth opportunities across Europe and other markets globally.
The transaction is expected to complete by the end of June 2013.