Online only retailer Ocado says that it has completed its online food joint venture with Marks and Spencer with the sale of 50% of Ocado Retail to a unit of M&S for £750 million (€817 million).
"Ocado Retail's future, as part of a joint venture with M&S, is full of opportunity,” commented Tim Steiner, Ocado’s chief executive.
“The new company will be able to offer customers even greater range, service, quality and value. Our collaboration will also allow us to grow the business faster, add more jobs, and create more value for all our stakeholders. We are very excited to be working together.”
Waitrose Agreement
Ocado Retail said that it will not sell M&S products until September 1 2020, unless Ocado Retail's current arrangements with Waitrose terminate sooner.
The company previously said the venture will trade as Ocado.com from September 2020 at the latest, following termination of Ocado's agreement with John Lewis Partnership's Waitrose.
M&S has financed the deal with Ocado through a £600 million pound rights issue and 40% dividend cut.
Shares of Marks and Spencer were down as much as 4.5%; Ocado down as much as 4.4% in morning trade.
M&S’ shares dropped ~12% on February 27, when the joint venture was first announced, reflecting the equity raise, dividend cut and concerns it had overpaid; Ocado rose 2.9%.
News by Reuters. Additional reporting by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
