Ashurst and Slaughters bag roles on Morrisons delivery deal with Ocado

Ashurst and Slaughter and May have advised on online retail group Ocado’s delivery deal with supermarket chain Wm Morrison Supermarkets.

Stephen Lloyd
Stephen Lloyd

Ashurst is advising Morrisons on the agreement, which will enable to start delivering grocies to customers from January 2014.

It includes a technology and services arrangement and a sale and leaseback of property and equipment at Ocado’s recently opened Dordon Customer Fulfilment Centre. As part of the deal, Morrisons will pay Ocado £170m to acquire Dordon and other mechanical and handling equipment and then a further £46m to expand the centre.

Morrisons will also pay service costs and a contribution to research and development expenditure on an annual basis.

Ashurst’s team was led by global corporate head Stephen Lloyd and also included corporate partners Adrian Clark and Karan Dinamani, senior associate Lucy Ward and associate Dominic Ross, with additional advice from IP and technology partner Mark Lubbock, associate Mark Sweny, real estate partner Anthony Burnett-Scott and competition partner Ross Mackenzie.

Slaughters acted for Ocado, putting forward Robert Stern alongside associates Jonathan Wiseman and Alex Dustan.

Ocado has an existing sourcing agreement with supermarket chain Waitrose, which Ocado said would remain unaffected by the Morrisons deal. However, Waitrose has reportedly instructed a QC for advice on whether the latest deal breaches the terms of its own agreement with the delivery group.

Background to this deal:

Waitrose uses Hogan Lovells for legal advice, but the firm declined to comment on whether it had been hired in relation to the Ocado-Morrisons deal. The firm guided Waitrose through its ten-year deal with Ocado in 2010, fielding commercial partner Peter Watts.

Slaughters has a longstanding corporate relationship with Ocado, having advising on its IPO, while other firms to have acted for the company include Shepherd & Wedderburnand Herbert Smith for real estate and Lancashire transport firm Backhouse Jones. The IPO was led by Stern and fellow corporate partner John Papanichola.

Ashurst has advised Morrisons since it took over supermarket chain Safeway in 2004 (13 January 2003), with Clark, Lloyd and partner Paul Gadd acting. Clark and Lloyd also advised when it considered a bid for frozen food chain Iceland in 2011 (31 October 2011), while Clark led its acquisition of Kiddicare in 2011. Competition partner Nigel Parr has also advised on a number of deals for the client, including its acquisition of 30 stores from Co-operative Group in 2009.