The new company is expected to enter the FTSE 100 as Dixons Carphone plc and create a retailer with around 3000 shops across the UK with combined revenues of £12bn. Dixons shareholders will receive 0.155 of a new Dixons Carphone share for each share held. The companies estimate they will cut their combined costs by at least £80m per year through merging.
The top ten shareholder list in Dixons is dominated by asset management firms. They include Standard Life Investments with 8.7% of issued shares, UBS Global Asset Management with 5.9%, AXA Investment Managers holding 5.6%, Schroder Investment Management with 4.5%, Old Mutual Global Investors has 3.5%, while Jupiter, Majedie Asset management and L&G Investment Management all have around 3% of the company.
The situation is similar with Carphone Warehouse which has major shareholders including M&G Investment Management with 6.6%, Kames Capital with 5.2%, Newton Investment Management has 3.9%, Aviva Investors has 3.4% and BlackRock owns 2.6%.
The two companies have been thrashing out the details of the proposed deal for the past three months. The merger will be executed through a scheme of arrangement later this year and requires approval of 75% of the shareholders in both companies as well as competition clearance.
Shares in both retailers have not reacted well to the news however, with Dixons shares trading down 3.4% at 49.1p and Carphone Warehouse shares down 1.7% to 322p.