BOSSES at Currys and PC World owner Dixons Retail Group and mobile phone firm Carphone Warehouse are in talks over a £3.6bn merger.

The companies have more than 3,000 stores with annual sales in excess of £12bn.

Dixons employs more than 31,000 workers in 12 countries, and the merger announcement comes after it reported a strong Christmas sales period with like-for-like sales in the UK rising five per cent in the three months to January 4.

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Carphone Warehouse, which has more than 2,000 outlets, revealed like-for-like revenues rose five per cent in the quarter to December 28, with its performance boosted by the popularity of more expensive smartphones.

A statement said: “The boards of Dixons and Carphone Warehouse confirm the two companies are in preliminary discussions regarding a possible merger.

“These discussions are at a very preliminary stage and there can be no certainty a transaction will be forthcoming.

“No decision has been reached regarding the structuring of any such merger.”