Ocado, the online grocer making waves on both sides of the Atlantic, is soaring after entering venture talks with an iconic UK retailer
- Shares in Ocado are surging on Tuesday after it was announced that it is in talks with UK retailer Marks & Spencer over a possible partnership.
- The announcement came after a report from the Evening Standard newspaper that the pair have sealed a deal to create a £1.8 billion ($2.4 billion) joint venture.
- News of the talks pushed Ocado's stock higher, with shares trading higher by more than 10% in the minutes after the talks were confirmed.
- Follow Ocado's stock price live at Markets Insider.
Shares in Ocado, the UK-based online grocer with operations on both sides of the Atlantic, are surging on Tuesday after it was announced that it is in talks with iconic UK retailer Marks & Spencer over a possible partnership.
Marks & Spencer, or M&S for short, operates more than 1,000 stores in the UK, and around 400 more globally. The firm said in a short statement that "following press speculation," talks with Ocado are underway "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," the statement reads.
The statement came after a report from the Evening Standard newspaper that the pair have sealed a deal to create a £1.8 billion ($2.4 billion) joint venture. The Standard reports that Marks & Spencer will "pay Ocado between £800 million and £900 million for a 50% stake in the new concern."
Under the joint venture, the newspaper added, Ocado will provide use of its delivery technology to Marks & Spencer, which has struggled to break into the delivery space in the UK, in return for Ocado gaining access to M&S' hundreds of thousands of UK customers.
News of the talks pushed Ocado's stock higher, with shares trading higher by more than 10% in the minutes after the talks were confirmed.
By 12.20 p.m. GMT (7.20 a.m. ET), the stock had moderated a little, and was trading at £9.65 ($12.74) per share, a gain of 8.9%, as the chart below shows. Marks & Spencer stock also climbed, gaining around 3% to trade at £3.00 ($3.96) per share.
Ocado has been making big moves to licence out its technology in the past year or so, with the retailer signing partnerships with the likes of Morrisons, the UK's fourth largest grocer.
Last May, Ocado signed a deal with Kroger, the largest supermarket in the United States, to build at least 20 robot-powered grocery warehouses.