British online grocer Ocado Group PLC said Aug. 5 that it has completed the sale of 50% of its retail business to a wholly owned subsidiary of retailer Marks & Spencer Group PLC for £750 million.
Under the partnership, Ocado will begin selling M&S' products on its online platform from Sept. 1, 2020, unless its existing arrangement with food retailer Waitrose Ltd. ends sooner, the grocer said in a filing to the London Stock Exchange.
Ocado added that its current Strategy Director Melanie Smith will become the CEO of the joint venture entity. Lawrence Hene, the current interim managing director of Ocado Retail, will become deputy CEO for a transitional period before moving back into a senior role at Ocado Group.
The grocer's CEO Tim Steiner will assume the position of board chair at the new entity.
Steiner said Ocado Retail will focus on accelerating business growth and creating jobs, along with providing customers access to more than 6,500 M&S food products.
"Ocado Retail's future, as part of a joint venture with M&S, is full of opportunity. 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," Steiner said in a statement.
For its part, M&S will leverage Ocado's technology to grow its food business through a scalable presence in the U.K. online grocery market.
"Through its unique OSP technology, Ocado has developed the most cost-advantaged model in online grocery retail and our new partnership unlocks growth for M&S Food through an immediately profitable, scalable presence in the U.K.'s fastest-growing grocery sales channel," said M&S CEO Steve Rowe.
During afternoon trading in London, M&S' shares were trading about 5.15% down at 190.40 pence apiece, while Ocado's stock slumped nearly 2.94% to 1,173 pence per share.