(Reuters) - British automotive distributor Inchcape said on Monday it had agreed to sell its UK retail operations to Group 1 Automotive UK for 346 million pounds ($431.43 million) in cash, following a strategic review it kicked off earlier this year.
The company, which exports cars for global manufacturers across 40 countries, said it would use 100 million pounds of the sale proceeds to buy back shares once the deal is complete. That is currently expected to be during the third quarter of 2024.
Shares in the company, which was listed on the London Stock Exchange in 1958, rose 3.3% to 721.5 pence in early trading.
Inchape's UK retail business has partnerships with brands such as Audi, BMW, Volkswagen (ETR:VOWG_p) and Toyota. The retail segment of the company contributes 10% to its total revenue, with functions only in the UK and Poland.
Last month, the company warned that demand in its key Americas market this year was likely to be towards historic lows, as high inflation and interest rates continue to strain household finances across the globe.
Group 1 Automotive, which was founded in the UK, is a used and new car and van retailer, with official dealerships in East and South East of England.
($1 = 0.8020 pounds)