M&S looking to buy Ocado and create £1bn food delivery service
- Credit: Archant
Marks and Spencer and Ocado are in talks to launch a £1bn food delivery service.
It has been reported that M&S is looking to buy the Waitrose part of the Ocado business, including distribution centres and vans, when the existing contract ends next year.
The news prompted shares in Ocado to gain 6.7%, surpassing 1,000p in early trading.
MORE: Norwich's online fashion retailer Miss Shoes tumbles into administration Meanwhile, M&S hit a high of 297.6p, up 2.6%.
The discussions have been ongoing over the past few weeks.
Russ Mould, investment director at AJ Bell, said: 'Such a move would be another tick in the box for Ocado, which is adding relationships with supermarkets in several parts of the world.
MORE: Reports Tesco could cut thousands of jobs 'For Marks & Spencer, having a stronger delivery network would give it a new way in which to try and boost earnings. There is no guarantee this would be the magic solution to fix its declining profits but it would put the business on a more level pegging with some of its key competitors.'