CURRYS and PC World owner Dixons Retail is to merge with Carphone Warehouse in a £3.7 billion deal that aims to plug in to the way technology is transforming modern households.

The new retail giant fuses together the mobile phone and electrical goods sectors amid an increasing focus on the "Internet of Things".

It will look to adapt to a new world where smartphones, tablets and rapid internet speeds will mean washing machines, fridges and boilers are controlled by the touch of a mobile device.

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Dixons chief executive Sebastian James said: "The ability to take what we have built in electrical retailing and add the profound expertise of Carphone Warehouse in connectivity would make us a leading force in retailing for a connected world.

"Together, we can create a seamless experience for our customers that will enable technology to deliver what it promises - that is, to make their lives better."

Mr James will be chief executive at the new group, to be known as Dixons Carphone, which joins two companies with combined sales of £12bn, employing more than 43,000 people across Europe.

An announcement on the widely predicted merger said it would lead to "significant job creation" with the roll-out of stores increasing retail jobs by four per cent, though efficiency savings from combining support functions would see these areas lose two per cent.