M&S and Ocado in talks about joint venture

Marks and Spencer (M&S) and Ocado have confirmed they are “in discussions” about a £1.8bn joint venture.

Shares in both companies jumped on the news about the deal, which would give M&S a food delivery service for the first time.

The London Evening Standard said any deal would see M&S pay Ocado between £800-900m for a 50% stake.

M&S said there was no certainty the discussions would result in any agreement.

Shares in M&S were up 3% on the news while Ocado was up 10%.

Currently Ocado has delivery deals with both Waitrose and Morrisons, as well as delivering its own branded goods.

Ocado’s deal with southern England-focused Waitrose is due to come to an end in September 2020.

Chief executive Tim Steiner said earlier this month that arrangement prevented it from supplying own label products from another leading UK grocery retailers.

The current agreement also gives Ocado the right to use the Waitrose brands on its website and on its fleet of more than 700 vans.