- Inchcape said the sale would help it focus on being a distribution-focused group.
- It intends to spend £100 million of the deal proceeds on a share buyback.
Inchcape plans to sell its UK retail operations to US car dealership giant Group 1 Automotive in an all-cash deal worth around £346m.
The group said the sale would help it focus on becoming a distribution-focused business covering fields such as logistics, product planning and after-sales.
It intends to spend £100m of the deal proceeds on a share buyback programme, with the remainder being used to fund future growth, acquisitions and organic investments.
Divestiture: 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 possible sale, following reports that the group had hired Rothschild bankers to oversee talks with potential buyers.
The division employs around 3,600 people across more than 80 sites and made £2.1bn of revenue last year, while posting an adjusted operating profit of £49m.
Once its sale is completed, Inchchape’s distribution activities will account for more than 99 per cent of its total revenue and operating profits.
Inchcape anticipates completing the transaction during the third quarter of 2024, pending approval from the Financial Conduct Authority.
Duncan Tait, CEO of Inchcape, said: ‘With our active international expansion into higher value distribution activities, the strategic importance of UK retail operations has become limited.
“Therefore, the board of directors has concluded that the time is right 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 operates just over 200 car dealerships and 265 franchises across the UK and US and sells more than 35 brands, from BMW to Ford, Land Rover and Nissan.
The company achieved its highest annual turnover of $17.9 billion last year, helped by strong growth in its British division and record sales of new and used vehicles.
Inchcape Stock rose 3.9 per cent to 725.5p on Monday morning following the acquisition announcement, but has stagnated since the start of the year.