Marks & Spencer and online retailer Ocado are launching a joint venture: M&S will now have a food delivery service as it buys Ocado's Waitrose customers for 750 million pounds (about a billion euros).
In practice, Ocado will be split in two, in accordance with the wishes of CEO Tim Steiner. He wants his company to focus on selling technology licenses to retailers across the world. In the past year, the company has been signing license agreements with retailers in Canada, Sweden and the United States. Currently, Ocado's value is estimated at 6 billion pounds (5 billion euros).
The second part, that will be put in the new joint venture, is Ocado's 721,000 active customers. The deal with Marks & Spencer will mean however that the company will have to say goodbye to Waitrose, which has been their supplier for two decades. Critics therefore wonder what M&S has actually bought for its money: they may gain Ocado's customers, but those people still think they are Waitrose's customers. The way the deal is financed has also raised some questions: M&S is burdened with a billion pound debt.