November 7, 2011
Best Buy Buying Out Carphone Warehouse
Best Buy Co Inc. announced on Monday that it is buying out its British partner Carphone Warehouse for $1.3 billion.
The company said it would buy out Carphone Warehouse Group Plc from a profit share of their Best Buy Mobile venture in the U.S. and Canada.
"Going forward, we are capturing the full profits from our Best Buy Mobile format," Chief Executive Brian Dunn said in a conference call with investors Monday
Best Buy said the buyout of Carphone's interest in a profit-sharing agreement will boost earnings next year. Carphone said it will return almost all of the proceeds to shareholders.
Best Buy has lead five straight quarterly declines at stores open at least 14 months and has closed 11 "big box" stores in the U.K.
The company said the move to purchase all of its mobile stores and stop sharing its profits with Carphone Warehouse would help lift future earnings next year by $120 million to $140 million.
Best Buy also announced on Monday that it is purchasing mindSHIFT Technologies Inc. for $167 million.
The move could help the company grow its business Internet technology services and stiffen up competition between it and online retailers like Amazon.com.
Best Buy said in a statement the acquisition will help expand its IT offerings to small- and mid-sized businesses.
MindSHIFT Technologies is a leading managed service provider for businesses and the acquisition is a move for Best Buy to get involved in the cloud computing industry.
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