Woolworths has increased its electronic retail market share in Australia to 6% after announcing that it will buy Tandy Electronics Australia from Canada-based InterTAN for $114 million.
The agreement will see the merging of Tandy with Woolworth’s wholly-owned Dick Smith subsidiary, with both businesses continuing to trade under the separate brands, the company said in a statement.
Dick Smith Electronics managing director, Jeff Grover, said DSE’s customers will “gain in terms of breadth of range, better prices and better national coverage.”
“We have much to learn and gain from each other, as well as having the opportunity to unlock synergies in our merged business,” Grover said.
The merger is expected to be earnings accretive for Woolworths’ shareholders in the 2001/2002 full financial year, with Woolworths continuing to trade all three brands – Dick Smith, Dick Smith Powerhouse and Tandy, the company said in a statement.
Woolworths ceo, Roger Corbett, said that while the merger is complementary to DSE and will increase the company’s electronics turnover to $600 million in the $10 billion Australian electronics retail market, the local electronics sector remains tough.
“The Australian electronics market is a tough and competitive growth sector and our electronics business will be competing in all sectors, against a number of strong operators,” Corbett said.
InterTAN, the former owners of Tandy Electronics Australia, also own the Radio Shack franchise in Canada.