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Dixons Confirms Pixmania Exit Following Works Councils Agreement

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Sept. 27 (Bloomberg) -- Dixons Retail Plc said it completed consultations with works councils for the sale of its online unit Pixmania and plans to close the transaction in December.

The U.K. electronics retailer will pay about 69 million euros ($93 million) in cash to support the unprofitable business after its purchase by Germany’s Mutares AG, Dixons said today in a statement, confirming an initial Sept. 5 announcement.

Today’s news means that Hemel Hempstead, England-based Dixons has agreed to exit two money-losing businesses this month. The retailer is also selling its Turkish operations to Bimeks Bilgi Islem & Dis Ticaret AS as it focuses more on the U.K., where it owns the Currys and PC World chains.

“I am delighted that we have been able to conclude consultations with the works councils so swiftly,” Dixons Chief Executive Officer Sebastian James said in today’s statement. “This is testament to the strength of the plans that Mutares has for the business.”

Pixmania has lost money for the last two financial years, weighing on Dixons’ progress. Losses more than doubled last year to 31.3 million pounds and like-for-like sales fell 28 percent in the first quarter of the current financial year.

Dixons paid 266 million pounds for a controlling stake in 2006. Pixmania sells in 14 countries and also operates a software business that develops Internet platforms used by Carrefour SA and French clothing retailer Celio.

Closing the business would have cost more than 90 million euros, Dixons Finance Director Humphrey Singer said Sept. 5.

To contact the reporter on this story: Paul Jarvis at pjarvis@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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