CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

M&S share price surges after Ocado joint venture deal confirmed

Marks & Spencer and Ocado have officially announced that they are ‘in discussions’ over a £1.8 billion joint venture, with the news sending shares in both companies higher on Tuesday.

Marks & Spencer (M&S) and Ocado saw their share prices surge more than 4% and 12% respectively on Tuesday after the pair confirmed rumours about a £1.8 billion joint venture deal.

If finalised the joint venture would give M&S a food delivery service for the first time, which the company has been under pressure to create to keep pace with its rivals.

M&S and Ocado joint venture talks confirmed

According to a report by the London Evening Standard, under the terms of the new joint venture M&S will pay Ocado between £800-900 million in exchange for a 50% stake in the food delivery company.

It remains unclear how M&S will finance the deal, with the company holding around £1.8 billion in debts on its balance sheet, suggesting that the joint venture will require a cash call on shareholders.

M&S was quick to point out that the pair are in discussions and no formal agreement had been reached at this stage.

Ocado to sever ties with Waitrose over M&S deal

According to reports, the pair are hoping to finalise a deal before March 1, so Ocado can activate its 18-month break clause with Waitrose, who has supplied its groceries in partnership with the delivery service for the last 20 years.

Ocado’s partnership with Waitrose is due to end in September 2020.

The deal with M&S will satisfy Ocado’s CEO Tim Steiner, who is keen to focus on licensing its platform to retailers, with the company agreeing such deals with businesses in Sweden, the US and Canada – adding £6 billion to the delivery service providers stock valuation.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

See an opportunity to trade?

Go long or short on more than 18,000 markets with IG.

Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.