Best Buy to Acquire $1.3 Billion U.S. Mobile Stake, Close UK Stores (BBY)

Best Buy Co. Inc. (NYSE: BBY) announced that it is buying Carphone Warehouse Plc out of a U.S. mobile phone joint venture. The Richfield, Minnesota-based company also said that it plans to shut down its U.K. stores as it scales back on its overseas expansion plans to focus on U.S.

Best Buy, which is a retailer of consumer electronics, home office products, entertainment products, appliances and related services, said that it would buy Carphone out of the Best Buy Mobile Venture in the U.S. for $1.3 billion. The move comes from the company as the mobile venture continues to benefit from increasing demand for smartphones.

Meanwhile, Best Buy also said that it is abandoning plans for a chain of European megastores. The move indicates that the retailer is looking to focus more on its U.S. business. Earlier this year, the company had abandoned plans to open stores in China and Turkey.

Best Buy also announced that it is closing its U.K. megastores, which were launched in partnership with Carphone in April 2010. The company expects the buyout of U.S. mobile venture and the closure of U.K. megastores would add $0.35-$0.40 per share to its earnings in fiscal 2013.

Best Buy and Carphone would incur a cost of approximately 65-75 million GBP to close their 11 stores in U.K. However, the two companies expect to redeploy most of the staff working at the stores.

Best Buy said that it would now focus on Carphone’s existing smaller format stores in Europe.

Best Buy, meanwhile, also announced that it signed an agreement to acquire mindSHIFT Technologies for $167 million. The acquisition will enable the retailer to accelerate its growth in the small and medium-sized business IT services category.

Best Buy shares have been inactive in pre-market trading. In the last one month, Best Buy shares gained 12.57%, outperforming the S&P 500, which has gained 7.58%.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.