1001 Monday 28 January 2019
Reports emerged this morning that Ocado are in talks with Marks & Spencer over a potential tie up in services. The move comes as M&S saw growth in food sales in their latest report and are looking to expand their services online.
Ocado are currently in a long term deal with Waitrose, by that deal expires in 2020. John Lewis & Partners, owners of Waitrose, were early investors in Ocado, but they sold their share of the business in 2011 for approximately £150m.
If a deal with Marks & Spencer were to take place, this would not signal an immediate termination of Waitrose products from the Ocado cart, but as Waitrose has developed its own delivery system online, it remains to been seen if the partnership would continue past the expiration of their current deal.
The market reacted very positively to the news as reports emerged, with Ocado gaining as much as over 6% in early trading and M&S stock rising over 2%.
2019 seems like it may be an interesting year for supermarket mergers with a deal between Sainsburys and Asda very likely, once they achieve regulatory approval, and a possible deal with Amazon and Morrisons still being rumoured to be taking place.
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