High street retailers Carphone Warehouse and Dixons have confirmed plans to merge their businesses.
Both companies used to dominate their respective fields of mobile phones and household electronics but have faced increased competition both online and from brands looking to sell direct.
The firms say the deal, which must be approved by shareholders, would create a retailer ready for the next wave of internet-connected gadgets – dubbed ‘the internet of things’.
Shareholders are being promised savings of £80m a year by eliminating duplications and greater efficiencies.
John Allan, Chairman of Dixons said: “This merger will create a new, world class British retailer for the new digital age, with new opportunities for growth and greater scale and reach.”
Sir Charles Dunstone, Chairman of Carphone, added: “Both Carphone and Dixons have a huge commitment to delivering the consumer the very best service, product and advice around the connected world.”