By Maryam Cockar
Shares in Ocado Group jumped in early trade Thursday after it said that it has agreed a deal to sell a 5% stake to Kroger, and to provide its delivery technology to the U.S. grocer.
The U.K. online supermarket group said Kroger will subscribe for up to 33.1 million new shares in Ocado, equivalent to 5% of Ocado's existing issued share capital. The 5% stake is worth 183 million pounds ($247.6 million).
Kroger has agreed to pay monthly fees which will offset in part the total fees that are expected to be agreed between the two companies, Ocado said.
Ocado said it expects the structure of the Kroger deal to be similar to previous deals it agreed with Groupe Casino, Sobeys Inc. and ICA Group.
Ocado said the two companies will identify three sites in 2018 for the development of new, automated warehouses in the U.S., and they will identify up to 20 sites over the first three years of the agreement.
Ocado said it doesn't expect the Kroger deal to have a financial impact on its earnings in fiscal 2018.
At 0729 GMT, Ocado shares were up 230 pence, or 42%, at 783.40 pence.
Write to Maryam Cockar at [email protected]