Inchcape to sell UK car dealership business for £346million to US rival

15 April 2024 , 07:44

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Inchcape has agreed to sell its UK business which employs 3,600 people (Image: No credit)

Inchcape, the car dealership firm, is set to sell its UK retail operations for a £346million.

The company has confirmed a deal to sell the operation, which employs 3,600 people across more than 80 sites, to US-based rival Group 1 Automotive. This follows Inchcape's announcement in January that it was considering options for the UK business, including a potential sale, after receiving "approaches from a number of interested parties".

On Monday, Inchcape boss Duncan Tait stated that the group's international expansion meant the "strategic importance of the UK retail operations has become limited". He further added: "The board has therefore concluded it is the right time for a new owner to take this business forward."

Post-deal, Inchcape will primarily focus on automotive distribution operations. The company plans to return around £100million to shareholders through a share buyback once the sale is completed, which is expected in the third quarter of 2024.

Mr Tait also said: "This transaction aligns with our strategic priorities, simplifies our business and represents a compelling opportunity to deliver meaningful returns to our shareholders. We believe it will enhance the group's overall value proposition and enables us to drive growth and long-term value creation for all stakeholders as we further develop our differentiated distribution platform."

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Inchcape's UK retail arm has clocked in revenues of about £2.06billion during the financial year of 2023, with an operating profit standing at £49million. The acquisition is set to significantly bolster Group 1's presence in the UK, where it currently operates 55 dealerships, predominantly in the south east and east of England.

Group 1 Automotive's president and chief executive Daryl Kenningham expressed his enthusiasm about the deal, stating: "We are delighted to have reached an agreement to acquire Inchcape's UK retail operations, which we have long admired given the company's reputation for exceptional customer service, attractive portfolio of OEM (original equipment manufacturer) brand partners and high-quality management team."

He added: "With our considerable automotive retail experience in the United States and the UK, we look forward to building on Inchcape's strong industry relationships and leveraging our expertise to support our combined operations in their next phase of growth."

Lawrence Matheson