8:01 am, August 1, 2024
US giant Group 1 Automotive has completed its acquisition of Inchcape’s UK dealerships in a deal worth £346m.
The two business made separate announcements on the London Stock Exchange this morning (Aug 1), and brings to a close a deal that was agreed in April.
The completion was given the go-ahead from the Financial Conduct Authority on July 29, and marks the ending of Inchcape’s retail business in the UK and effectively doubles Group 1’s UK footprint.
Divested of its showrooms, Inchcape will now become an automotive distributor.
Group 1, which has 260 dealerships in the US and UK, will now add Inchcape’s 54 sites to its portfolio. It said it expected the dealerships to generate $2.7bn (£2.1bn) in annual revenues, bringing 2024 year-to-date total acquired revenues to $3.8bn (£2.9bn).
The acquisition sees Group 1 spread its business into the Midlands, the north west of England, and Wales. Its portfolio now includes brands such as Audi, BMW/Mini, JLR, Lexus, Mercedes-Benz/Smart, Porsche, Toyota, Volkswagen and Volkswagen Commercial Vehicles.
Group 1’s president and chief executive officer Daryl Kenningham, said: ‘This transformative acquisition effectively doubles our UK footprint, giving us access to new markets throughout England with a collection of outstanding brands.
‘We are delighted to welcome our new team members as we collaborate to deliver an excellent customer experience.’
Group 1 senior vice president and chief financial officer Daniel McHenry added: ‘Inchcape Retail and its team bring a 50-year reputation to Group 1’s UK presence.
‘This strategic acquisition is aligned with our capital allocation strategy, which enables us to identify opportunities that create additional scale and value for our shareholders.’
Making the announcement for Inchcape, CEO Duncan Tait said: ‘We are pleased to have completed the divestment of our UK retail business, which represents a major strategic inflection point for Inchcape, as we deliver on our ambition of becoming the leading distribution partner to our OEM partners around the world.
‘I would like to express my sincere gratitude to our former UK colleagues for their service and commitment over the years and I know the business will play an important part in further developing Group 1’s position in the UK automotive retail market.’
Inchcape will now focus on operating as a ‘purely distribution operator’.
In the acquisition completion statement, Inchcape said: ‘Distribution is higher-margin, more capital‐light, higher return, more cash-generative, compared to retail-only businesses.’
The completion comes in the same week as Inchcape published its half-year results for 2024.
It finished H1 with revenue reaching £4.7bn – a 4% change on the same period in 2023.
