Carphone Warehouse and Dixons could merge

(Reuters) - Britain's Dixons Retail and Carphone Warehouse are in merger talks that could create an electrical goods and mobile-phone group with a market capitalisation of more than 3.4 billion pounds.

A combination of Dixons, Europe's No. 2 electricals retailer, and Carphone, Europe's largest independent mobile-phone retailer, would probably place the merged group in Britain's FTSE 100 index of leading companies.