Slaughter and May is advising Ocado Group on its online grocery retail JV with Marks and Spencer Group

Slaughter and May is advising Ocado Group plc ("Ocado") on its online grocery retail 50/50 joint venture ("JV") with Marks and Spencer Group plc ("M&S"). Ocado has agreed to establish a JV comprising Ocado's UK grocery retail business ("Ocado Retail"), supported by a new partnership for solutions services underpinned by Ocado Smart Platform ("OSP") and the provision of branding and sourcing from M&S. M&S has agreed to pay Ocado £750m (including deferred consideration) for a 50% share of the new JV with Ocado retaining 50% ownership.
The JV (trading as will combine M&S's highly regarded branded food and beverage range with Ocado's existing range of Ocado own label and third party branded products to offer over 50,000 product lines to consumers. M&S product will be available on the platform by September 2020 (the "Switchover Date"), replacing Ocado's current sourcing agreement with Waitrose Limited ("Waitrose"). The new solutions contract will result in the JV becoming one of Ocado Solutions' largest partners and will provide the JV with full access to Ocado's proprietary technology to continue to deliver a compelling online grocery retail offer.
Ocado will receive consideration of £750m comprising £562.5m in upfront cash and a deferred cash payment of £187.5m, plus interest, payable five years after completion depending on the satisfaction of certain financial and operational conditions.
From the Switchover Date, the new sourcing and branding contract with M&S will provide the JV with M&S product at cost, exclusive rights to sell M&S's full range of food and beverage products online and non-exclusive rights to sell M&S's general merchandise products online. The JV will also continue to source its wide range of third-party branded goods.

The formation of the JV is a Class 1 transaction for Ocado under the Listing Rules and is therefore conditional on the approval of Ocado's shareholders at a General Meeting expected to be held in Q2 2019 and other customary completion conditions. The current expectation is that the Transaction is expected to close in Q3 2019

Slaughter and May has a long-standing relationship with Ocado having advised it on its IPO, its branding and sourcing arrangements Waitrose, its partnership with Morrisons and on a variety of other capital markets and corporate transactions. Slaughter and May advised on this matter alongside Ocado’s General Counsel, Neill Abrams, and Ocado’s Deputy General Counsel, Jonathan Wiseman.

John Papanichola Senior Consultant
Aleezeh Liaqat Partner
Thomas Potter Associate
Oliver Moir Partner
Laura Houston Partner
John Nevin Partner
Matthew Tobin Partner
David Hay Partner
Gareth Miles Partner
Tomas McGrath Associate
Lisa Wright Partner