Kroger paying $247M to license Ocado online home-delivery technology

The Kroger Co., America’s largest supermarket chain, said Thursday it is spending $247 million to license exclusively the home-delivery technology of Britain’s Ocado Group online supermarket.

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The deal boosts Kroger’s stake in Ocado, whose shares popped more than 50 percent in premarket trading, by 5 percent to 6 percent.

Kroger and Ocado are working to identify the first three sites in 2018 for development of new, automated warehouse facilities in the U.S., and will identify up to a total of 20 over the first three years of the agreement.

“Ocado’s unique, proprietary and industry-leading technology is set to transform the shopping experience of consumers around the world,” said Tim Steiner, CEO of Ocado Group.

The new relationship is not expected to affect Kroger’s earnings per diluted share guidance range for 2018 and 2019 as it is already reflected in the company’s “Restock Kroger” plan.

Kroger, the largest U.S. supermarket chain by revenue, operates about 2,780 supermarkets in the U.S. and has some 443,000 employees.

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