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Move over Waitrose? M&S in talks to buy Ocado

Marks & Spencer is in talks with Ocado over the launch of a food delivery service, in a move that suggests Waitrose could be parting company with the online shopping delivery firm.

On Tuesday the companies issued identical statements confirming that they were in discussions “regarding a joint venture in UK retail”.

News of the potential alliance leaked out in January but at that time neither company would comment on the reports.

Shares in both Ocado and M&S have risen sharply following the confirmation of talks on the joint venture.

Ocado said: “Following media speculation, Ocado Group plc confirms that it is in discussions with Marks and Spencer Group Plc regarding a joint venture in UK retail.

“There is no certainty that these discussions will result in any agreement or as to the timing of any such agreement.”

Rumours about a deal, that would see M&S become Ocado’s supply partner, have been swirling since January and would give the high street retailer its first online food delivery outlet.

It has been placing a greater emphasis on growing the food side of the business as it continues attempts to revive its flagging fashion and homeware offerings.

The Evening Standard reported that the pair had been trying to secure agreement by 1 March – a deadline for triggering an 18-month break clause between Ocado and its current supply partner, Waitrose.

The paper said that M&S would effectively be paying to take control of Ocado’s customer base of more than 700,000 households, leaving Ocado free to concentrate on the licensing of its robot-driven warehouse technology.

A series of deals with international companies has driven a rapid rise in Ocado’s market value in recent years.

But a fire which gutted its automated warehouse in Andover last month has threatened to set back not only its deliveries but also its systems if the investigation finds fault with designs. The owner of Waitrose, John Lewis & Partners, was yet to comment on the announcement.


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