Carphone Warehouse gets cosy with Best Buy in £1 billion deal

Giant Electronic Retailer Best buy has purchased a huge 50 percent stake in Carphone Warehouse for £1.1 billion according to sources close to the deal.

The Fortune 100 company holds 17 percent of the consumer electronic market in the United States and its partnership in the UK market could provide it with the necessary know-how to penetrate he European Market.

Best Buy has 140,000 employees and an annual revenue of £20 billion last year and its arrival in UK is its first major expansion spurt outside the UK.

The two companies had been working together since 2006 since CPW started offering a UK version of Best buy's Geek Squad IT service, something that PC World also offers through its The Tech Guys support service.

Later last year, Best buy purchased a three percent stake in CPW. The British company also tried to sell mobile phones through US Best Buy stores.

The deal only concerns Carphone Warehouse retail business though and excludes its fixed line service which had been judiciously (and some might say coincidentally) detached from the mother ship a few weeks ago.

The money, some sources say, could be used to expand Carphone Warehouse even more though acquisitions - the UK portion of Tiscali for example, to repay outstanding debts, further its investment in broadband and local loop unbundling and foster customer growth.