Ocado gets GBP750 million from Marks & Spencer as partnership confirmed
cado Group and Marks & Spencer entered a deal which will see M&S pay GBP750 million to Ocado for a 50% stake in the joint venture, slightly less than expected.
Marks & Spencer will pay GBP562.5 million in upfront cash, with a deferred cash payments of GBP187.5 million plus interests payable within five years and based on unspecified financial and operational conditions.
The deal is expected to close in the third quarter of 2019.
The joint venture, trading as Ocado.com, will combine Marks & Spencer's branded food and beverage range with Ocado's own label and third party products.
Marks & Spencer products will be available on Ocado's website from September 2020, replacing the online grocer's supply deal with Waitrose Ltd, its partner for two decades.
Ocado Group and Marks & Spencer rushed to announce the deal before March 1, the deadline for Ocado to trigger an 18-month break clause with Waitrose.
Ocado said that the proceeds from the joint venture will enable it to fully fund the development of its automated warehouses, known as customer fulfillment centres. ■