Ocado has reportedly abandoned its pursuit of a £190.7m payment from Marks & Spencer, drawing a line under the long-running dispute surrounding the pair’s online grocery joint venture.
No final payment will be made by M&S, according to The Times, despite Ocado previously warning that it could take legal action to recover the money.
M&S acquired a 50 per cent stake in Ocado Retail for up to £750m in 2019, enabling the retailer to sell its food range online through Ocado.com.
The retailer paid £562m upfront, with a further £190.7m dependent on the joint venture meeting undisclosed financial targets in the year to November 2023.
Those targets were not achieved, prompting M&S to value the outstanding liability at zero.
Ocado had argued that adjustments should be made to reflect decisions taken during the pandemic, which it said had affected customer numbers, capacity and the joint venture’s financial performance.
Chief executive Tim Steiner previously insisted the technology group was owed a “substantial sum” and said it would not walk away from the claim.
However, the two businesses are now understood to have resolved the matter without a payment changing hands.
The development comes as M&S and Ocado hold separate talks about the future expansion of their grocery partnership.
M&S has reportedly declined to approve additional customer fulfilment centres or commit more volume to Ocado’s existing warehouses until revised commercial and technical terms are agreed.
It is understood to be seeking improved operational efficiency, system upgrades and more favourable terms governing the amount Ocado charges for warehouse capacity.
An M&S spokesperson said the retailer had a good relationship with Ocado and that the businesses remained in regular, positive discussions about unlocking the partnership’s full potential.
Ocado said both companies continued to focus on the growth and success of Ocado Retail.
The online grocer delivered a stronger performance during the first half of its financial year, with revenue rising 15 per cent and orders increasing 13 per cent.
Adjusted earnings before interest, tax, depreciation and amortisation more than doubled from £33m to £73m, while adjusted pre-tax earnings reached £12m, compared with a £17m loss the previous year.
Ocado said the joint venture was now profitable across its key measures and planned to increase order capacity while maintaining its recent growth.
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