 announcement if its long-awaited deal with French retailer Groupe Casino, shares in the company soared){kind=link}
Following Ocado’s (LON:OCDO) announcement if its long-awaited deal with French retailer Groupe Casino, shares in the company soared over 20 percent.
As part of the deal, Casino will build an automated warehouse close to Paris using Ocado’s mechanical handling equipment. The new warehouse will be able to handle £350 million worth of annual sales.
The new building will start immediately and will take up to two years.
Jean-Charles Naouri, chief executive of Groupe Casino, said: “This agreement is a major leap in terms of quality: 50,000 food items will be offered in the first stage to customers in the Greater Paris area with precise and speedy delivery at home and through a platform which makes it achievable to do this profitably.”
Tim Steiner, Ocado’s co-founder, said he was “delighted” and that Ocado is planning many more deals.
“We continue to make investments to commercialise our proprietary platform and expect this deal to be one of many successful collaborations with leading retailers to use it the world over.”
“We aim to sign multiple deals in the medium term and I don’t think today’s announcement will do any harm to our prospects of doing that – but you shouldn’t expect one per week,”
The deal that Ocado has made has been in the pipeline for a long time. It was back in 2015 that Steiner said he was “confident” in finding a partner by the end of the year. Investors have had to wait until now for the deal to be confirmed.
“This is a transformative deal for Ocado as not only will it expose the firm to a large chunk of the French market, it could also be the launch pad for many more international partnerships,” said Neil Wilson, a senior market analyst at ETX capital.
Shares in the group were up 23 percent to £3.16 in early trading.