Inchcape, a well-respected automobile dealership firm, has formally announced the impending sale of its UK retail operations to US-based competitor Group 1 Automotive for a substantial sum of £346 million. This decision follows the company’s evaluation of various options for the UK business, including potential sale, in response to expressions of interest from multiple parties earlier this year. According to Inchcape’s CEO, Duncan Tait, this strategic shift aligns with the group’s international expansion strategy, as the strategic importance of the UK retail operations has become limited. The board of directors has also determined that the timing is appropriate for a new owner to take the business forward.
The sale will enable Inchcape to focus primarily on its automotive distribution operations, an area of significant importance for the company. Additionally, it is anticipated that approximately £100 million will be returned to shareholders through a share buyback once the sale is completed, which is expected in the third quarter of 2024.
In 2023, Inchcape’s UK retail business generated approximately £2.06 billion in revenues and an operating profit of £49 million. The acquisition of these dealerships is expected to significantly expand Group 1’s UK presence, as the company currently operates 55 dealerships, primarily located in the south east and east of England.
Daryl Kenningham, president and chief executive officer of Group 1 Automotive, has expressed his pleasure in acquiring Inchcape’s UK retail operations, citing their reputation for exceptional customer service, attractive brand partners, and high-quality management team. With extensive automotive retail experience in the United States and the UK, Group 1 Automotive is enthusiastic about utilizing Inchcape’s industry relationships and its own expertise to support the combined operations in their next phase of growth.
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