Dixons adds to European exposure with £64m Italian electricals buy

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The Independent Online

Dixons, Britain's biggest electrical retailer, strengthened its position in continental Europe yesterday when it bought a 24 per cent stake in UniEuro, the second largest electrical retailer in Italy. Dixons is paying £64m cash for the stake with an option to buy the whole group by July 2003.

Separately, Dixons announced that it is selling a tranche of shares in Wanadoo, the French internet service provider which it acquired as a result of the sale of Freeserve a year go. Dixons is selling 40 million of its 180 million shares for around 6 euros per share (370p), raising 240m euros (£149m).

Dixons' deal in Italy is the latest in a series of European expansion moves by the company. It already owns the Elkjop group, which trades in Scandinavia, and has bought a stake in a business in Greece. It is opening stores in Spain and France and will move into Hungary in the first quarter of next year.

UniEuro has 61 stores in Italy, mostly out-of-town locations in the north of the country. Last year the group recorded operating profits of £25m on sales of £234m. The business has been growing strongly, with like for like sales in the 10 months to October up by 11 per cent on the same period last year.

The price for the remaining equity has been fixed at £264m.

Iain Livingstone, Dixons' finance director, said the deal made financial sense even before cost-savings were factored in. There would be synergy benefits from improved buying power and expertise, he added. John Clare, Dixons' chief executive, said: "In UniEuro, Dixons has found its ideal partner for Italy, which is one of the top four electrical markets in Europe. "

Dixons' planned sale of 40 million of its Wanadoo shares represents its first direct sale of part of its stake. The group sold 37.5 million shares through a convertible bond arrangement in March. Under the Wanadoo deal, which valued Freeserve at £1.65bn, Dixons can sell its stake only on a phased basis.

Dixons shares closed 5.5p higher, at 243p.