Ocado share price up 12% after striking deal with Aeon

Online grocer Ocado saw its share price soar on Friday after striking a deal with Japanese retailer Aeon, the company’s first partnership in Asia.

Ocado saw its share price climb 12% higher on Friday, after striking a deal with Japanese retailer Aeon to develop its online grocery business.

The deal is Ocado’s first partnership in Asia.

‘I am delighted to welcome another extraordinary retailer, and the first from Asia, to the unique international club of grocers powering their ecommerce operations with Ocado,’ CEO of Ocado Group Tim Steiner said.

‘This partnership marks a major milestone for the food retail landscape in Japan, and I am excited that Ocado will play a key role in bringing ever greater levels of convenience and choice to Aeon's customers.’

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Ocado’s share price exceeds analysts’ expectations

Of the 16 analysts offering 12 month price targets for Ocado the median target for the stock is £11.75, with a high estimate of £17, according to data compiled by the Financial Times.

Ocado’s deal with Aeon has helped it exceed the median share price target issued, with it trading at £13.48 at 12:30 GMT on Friday.

Based on Ocado’s current share price the high estimate for the stock indicates a potential upside of 26%.

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Ocado strikes first partnership in Asia

Aeon will launch a new online business using the Ocado Smart Platform, harnessing Ocado's unique, proprietary customer fulfilment centres and end-to-end software applications to serve millions of customers across Japan.

The agreement plans for the development of a national fulfilment network to serve the whole of the Japanese market, with expected sales capacity of around ¥‎600 billion by 2030, growing to approximately ¥‎1 trillion by 2035.

‘We see Ocado as a state-of-the-art, exciting and transformative partner aligned with our strategy of accelerating Aeon's Digital Shift to serve Japan's consumers,’ CEO of Aeon Motoya Okada said.

‘We will be able to give consumers the convenience and more importantly "time" to let them fulfil other more meaningful aspirations.’

Aeon is one of Japan's longest-established retailers. It is also one of Asia's largest retailers, with over 580,000 employees and approximately 100 million customers.

Aeon operates over 21,000 stores across various businesses, with operations in 14 countries.

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