The mainly US-based Experian credit checking agency will take on all of GUS's 拢2bn debts and will issue shares worth between 10% and 15% of its share capital to strengthen its balance sheet, the company said.
GUS has discussed breaking up for several months, but previously refused to set a date for the demerger, as private equity groups considered making bids worth 拢6bn or more.
Sir Victor Blank, GUS chairman, said: "A UK demerger will enable all of GUS's existing shareholders to continue to participate directly in the future development of these successful businesses."
Experian will not be listed in the US because a "significant proportion of our current shareholders would have been obliged to sell, or not buy the shares in Experian", David Tyler, GUS finance director, said.
Chief executive officer John Pierce said Experian was worth between 拢6bn and 拢9bn, while analysts put the figure at between 拢7.2bn and 拢7.5bn. Argos, which also includes DIY chain Homebase, is estimated to be worth around 拢4.4bn.
Last week, the Daily Telegraph reported that GUS had rejected a 拢7bn approach for Experian from US private equity firms including Thomas H Lee and Bain Capital. Last month, The Sunday Times said Hellman & Friedman and Kohlberg Kravis Roberts were also considering making an offer.
"If someone wants to come along and offer a compelling price, that's something the board would have a duty to look at," Peace said.
As a result of the merger the name GUS, originally Great Universal Stores, will disappear after more than 70 years in business. The two companies will keep their existing management teams.
In December, GUS sold its stake in luxury fashion label Burberry, after having already sold its home shopping operations, in preparation for a split of its remaining businesses.
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