Dixons and Carphone plc is Europe`s leading specialist electrical and telecommunications retailer and services company headquartered in London, United Kingdom, employing over 40,000 people in 9 countries(Dixons Carphone,2014). This company was the merger of Dixons Retail and Carphone Warehouse on 7th August 2014. From former experience, that the merger of two falling firms tends not to have a good ending, but fortunately, the result of this merger is favourable for both companies so far. It combined two main electrical retailer and services company in UK`s market, and their margin are falling in the past years. The two parties had several meetings before they signed the paper, and they finally agreed a £3.8bn "merger of equals" to create an electricals retailer selling phones to fridges, and offering service and support alongside a multitude of gadgets(theguradian,2014). The merger helps them to gain more profit than before, as reported, Dixons Carphone has 21% rise in profit(BBCNews,2015). Many factors caused the merger of Dixons and Carphone Warehouse. Most important reason is there are no bright prospect for both parties before the merger, both companies are trying to protect them from the competitive and unpredictable market and seeking new opportunities for development.
This essay will report the process of this merger happened in 2014 and analyze the impact of this financial event on both parties by using relevant financial theory.