Ocado shares surge amid Amazon acquisition speculation

Ocado Amazon Image credit: Yau Ming Low via Shutterstock

Shares in Ocado have surged following suggestions that the British grocery technology firm could be acquired by US tech giant Amazon.

First reported by the Times, Amazon, which has been looking to ramp up its grocery business recently, could view Ocado as a natural fit to further this goal.

Amazon has already launched physical grocery locations in the UK and beyond in the form of its till-less Amazon Fresh shops. The company also holds a 16% stake in the London food delivery firm Deliveroo.

Despite being one of the UK’s most prominent players in the industry, Ocado’s share prices have fallen massively since its peak in 2020, when the pandemic supercharged the performance of home delivery firms.

While share prices have jumped by around 30% since reports of Amazon’s interest, its overall weakened stock could make it a prime candidate for a US acquisition.

Amazon and Ocado have declined to comment on the situation.

Should a deal be reached, it would be subject to regulatory approval, in particular from the Competition and Markets Authority (CMA), which has intervened in several acquisitions made by major US tech firms over the last two years.

Most notably, the CMA blocked Microsoft’s attempted acquisition of the video game publisher Activision Blizzard, which the two companies are appealing. The regulator also took action against both Google and Meta for attempting to consolidate markets through acquisitions.

Amazon itself has been the subject of multiple CMA investigations, including a joint probe with the EU over accusations of favouritism in the promotion of products in its marketplace.

The CMA last week did give approval for Amazon’s acquisition of the Roomba developer iRobot, in a potentially positive sign for the firm’s future merger ambitions.