Ocado-M&S joint venture deal is completed

As part of a plan announced earlier this year, Ocado has sold half of its UK business to M&S, which recently announced the completion of the deal.

“This marks the start of M&S’s 50/50 Joint Venture (JV) with Ocado Group Plc, comprising Ocado’s UK grocery retail business (“Ocado Retail Ltd”), supported by the Ocado Smart Platform (OSP) technology,” an M&S press release last week said. M&S’s Melanie Smith, its strategy director since 2017, was named CEO of the tie-up with Ocado, the company said.

Terms of the deal totaled £750 million, according to the website Campaign. “M&S has paid an upfront £562.5m, with a further £187.5m conditional on performance over five years, for a 50% stake,” Campaign reported.

Retail Gazette had these details: “The deal means M&S will be able to offer an online grocery delivery service, while Ocado shoppers will be able to choose from over 6500 M&S products while shopping on Ocado.com, alongside the retailer’s own brands and own label products. However, due to Ocado’s current arrangements with Waitrose, it won’t begin selling M&S products until September 1 2020, unless its agreement with Waitrose comes to an end before then.”

The deal has been in the works since late February, the same month that Ocado experienced a massive fire at one of its robotic warehouses.

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