Marks and Spencer teams up with Ocado on food delivery service
Marks and Spencer is embarking on a joint venture with Ocado to enable it to offer an online food home delivery service.
The deal will see M&S acquire a 50% share of Ocado’s UK retail business for up to £750 million.
The new joint venture will trade as Ocado.com but will benefit from access to M&S’s brand, products and customer database from September 2020 at the latest. It will follow the expiry of Ocado’s current delivery partnership with Waitrose.
Steve Rowe, M&S chief executive, said: “I have always believed that M&S Food could and should be online. Combining the strength of our food offer with leading online and delivery capability is a compelling proposition to drive long-term growth.
“Our investment in a fully aligned joint-venture with Ocado accelerates our food strategy as it enables us to take our food online in an immediately profitable, scalable and sustainable way.”
The transaction will be mainly financed by equity and the M&S board will conduct a rights issue to raise up to £600 million.
Tim Steiner, Ocado chief executive, added: “We are delighted that our UK retail business will become a joint venture with M&S. This is a transformative moment in the UK retail sector with the combination of two iconic and much-loved retail brands set to provide an unrivalled online grocery offer.”
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