The GBP 500 million or the US$775 million sale is an indicator that Best Buy, the world's biggest consumer electronics chain would be scaling back its operations overseas to focus on US business. The sale is its joint venture shareholdings with the Carphone Warehouse Group at less than half of what it shelled out five years ago.
Even back home, the retail giant faces cut throat competition from companies such as Wal-Mart and Amazon.
With the sale, the balance sheet would help improve the balance sheet of Best Buy as well as simplify its business in improving its return on capital invested. According to CEO Hubert Joly of Best Buy, the timing and the economics of the deal was at the right time.
For its part, Carphone Chief Executive Roger Taylor said, "Best Buy basically paid 1.1 billion pounds for the same half they are selling back to us today for a lot less. When they bought in they had aspirations to put Best Buy stores across Europe and they probably paid a premium for that and in the end that strategy didn't work for may reasons."
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