Inchcape plans to sell its UK retail operations to US car dealership giant Group 1 Automotive in an all-cash deal worth around £346million.
The group said the sale would help it focus on becoming a distribution-focused business covering fields like logistics, product planning and aftersales.
It intends to spend £100million of proceeds from the deal on a share buyback programme, with the remainder used to finance future growth, takeovers and organic investment.
Disposal: Inchcape said the sale of its UK retail operations to Group 1 Automotive would help it focus on becoming a distribution-focused business
In January, Inchcape said it was ‘reviewing strategic options’ for the UK business, such as a potential disposal, following reports the group had hired bankers from Rothschild to oversee discussions with potential buyers.
The division employs around 3,600 people across over 80 sites, and earned £2.1billion in revenue last year while posting a £49million adjusted operating profit.
Once its sale is completed, Inchchape’s distribution activities will account for more than 99 per cent of its total revenue and operating profit.
Inchcape anticipates finalising the transaction during the third quarter of 2024, dependent on Financial Conduct Authority approval.
Duncan Tait, chief executive of Inchcape, said: ‘With our active international expansion into higher value distribution activities, the strategic importance of the UK retail operations has become limited.
‘The board has therefore concluded it is the right time for a new owner to take this business forward.’
He added: ‘In Group 1, our UK Retail operations will have a new owner with a strong track record of industry growth, existing presence and retail experience in the UK market, and a strong balance sheet.’
Headquartered in Houston, Texas, Group 1 runs just over 200 car dealerships and 265 franchises across the UK and US and sells over 35 brands, ranging from BMW to Ford, Land Rover and Nissan.
The firm achieved its highest-ever annual turnover of $17.9billion last year, helped by solid growth at its British arm and record sales of used and new vehicles.
Inchcape shares rose 3.9 per cent to 725.5p on Monday morning following the takeover announcement, but have flatlined since the year started.
Read More: World News | Entertainment News | Celeb News
Mail Online
