NEW YORK (AP) — Best Buy is looking to exit Europe, selling its stake in its joint venture there to partner Carphone Warehouse Group PLC in a cash-and-stock deal valued at 500 million pounds (about $775 million).

The consumer electronics company said Tuesday that the deal allows it to streamline its business and strengthen its balance sheet. The chain said that the sale of its 50 percent interest in Best Buy Europe doesn't suggest any similar action will be taken in its other international businesses, which includes China and Canada.

Best Buy shares rose almost 3 percent in premarket trading.

Best Buy and Carphone, a cell phone retailer, entered their joint venture agreement in 2008. At that time Best Buy had plans to open several of its big box stores in Europe, but the difficulties both Best Buy and Europe have faced since the recession made it tough to implement the plans.

Best Buy has been working hard to improve its business. The Minneapolis company faces tough competition from online retailers and discounters. It has cut jobs, invested in training employees and started matching online prices.

Best Buy said that before reaching the deal with Carphone, the joint venture's fiscal 2014 revenue was expected to be in the range of $5.5 billion to $5.6 billion. Adjusted earnings per share were anticipated to be immaterial.

The transaction includes 420 million pounds in cash ($650.6 million) and 80 million pounds ($123.9 million) in Carphone stock. The stock portion of the deal is subject to a 12-month lockup restriction.

Best Buy Co. will also pay Carphone 29 million pounds (about $45 million) related to existing agreements that will be terminated when the deal closes.

Best Buy said that it will incur an approximately $200 million asset impairment charge related to the stake sale.

Both companies' boards approved the transaction, which still needs the approval of Carphone shareholders. The deal is targeted to close by June's end.

Shares of Best Buy added 69 cents, or 2.9 percent, to $24.89 in premarket trading.