M&S and Ocado in £750m food delivery tie up
Marks & Spencer and Ocado have confirmed a much touted deal which will give the former a food delivery service for the first time.
M&S is acquiring a 50% share of Ocado’s UK retail business, which will be supported by Ocado Smart Platform (OSP), for £750 million. It will fund the deal by selling £600 million of shares and by cutting its dividend payout to shareholders by 40%. The joint venture will be called Ocado and will deliver M&S products from September 2020 at the latest, when the former’s deal with Waitrose expires.
Also of interest: Ocado JV too little, too late for M&S, GlobalData
“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,” says Steve Rowe, M&S CEO.
“Combining the magic of M&S Food with Ocado’s leadership in online technology allows us to transform UK online grocery shopping by offering customers the broadest, most innovative and relevant range in UK food retail with award-winning service. Our partnership with Ocado will create shared value for our customers, colleagues, supplier partners and shareholders, operating with a common sense of purpose and values.”
The JV is “a transformational step forward in shaping the future of M&S and in becoming a truly digital first retailer with at least a third of the business online,” Rowe concludes.