Carphone Warehouse is buying the 50 percent stake Best Buy Incorporated holds in the two companies' Best Buy Europe joint venture for £500 million.

The joint venture was created in 2008, after Best Buy paid £1.1 billion to buy half of it, so this latest deal equates to a loss. The purchase price of the new deal is made up of £420 million in cash and £80 million in Carphone Warehouse shares subject to a 12-month "lock-up" restriction.

In conjunction with the transaction Best Buy has agreed to pay Carphone Warehouse £29 million to satisfy obligations under existing agreements, including the parties' Global Connect partnership, which will be terminated at the closing of the deal.

In 2011 Carphone Warehouse sold its stake in the US version of its retail joint venture with Best Buy to its partner for over $1 billion. This move led to Roger Taylor, the Carphone Warehouse chief executive, saying his group was now focussed on its European business, while Best Buy was concentrated on the US market.

The latest transaction is expected to close by the end of June 2013. Prior to entering into this agreement, US GAAP revenues for Best Buy Europe in fiscal 2014 were expected to be in the range of $5.5 to $5.6 billion, said Best Buy. Adjusted (non-GAAP) diluted earnings per share were "expected to be immaterial", it said.

"After reviewing the business we concluded that the timing and economics were right to enter into this agreement with Carphone Warehouse," said Hubert Joly, chief executive officer of Best Buy. "This transaction allows us to simplify our business, substantially improve our return on invested capital, and strengthen our balance sheet."

The joint venture currently operates 2,400 stores across eight countries trading under the Carphone Warehouse and Phone House brands. There has so far been no news on store closures or jobs losses as a result of the impending sale.