M&S and Ocado “in discussions” for £1.8bn joint venture
Following press speculation, Marks and Spencer Group PLC has confirmed that it is in discussions with Ocado Group plc regarding a joint venture in the UK retail market.
M&S has confirmed that it is in discussions with Ocado regarding a joint venture in the UK retail market.
The company say there is no certainty that these discussions will result in any agreement, or as to the timing of any such agreement.
Shares in both companies jumped following the news, which would give M&S a full food delivery service for the first time. Breaking newspaper reports suggest that any deal would see M&S pay Ocado between £800-900m for a 50% stake.
Speculation is now rife that the deal might suggest the end of Ocado’s current arrangements with Waitrose, which is due to expire next year. That agreement currently allows Ocado the right to use the Waitrose brands on its website and its fleet of more than 700 vans.
Chief executive of Ocado, Tim Steiner, is reported as saying earlier this month that the Waitrose arrangement prevented it from supplying own label products from another leading UK grocery retailer. However, in a statement issued this morning, M&S said there was no certainty the discussions would result in any agreement.
At the time of writing M&S shares were up 3% while Ocado was up 10% on the news.
Currently Ocado has delivery deals with both Waitrose and Morrisons in the UK, as well as delivering its own branded goods.
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