Ocado Group has ended its long-running efforts to get a payout of £190 million from Marks & Spencer (M&S), removing a major point of contention between the two companies, the Times has reported.

Citing sources, the paper said that there will be no final payment made by M&S. The issue stemmed from the terms of the pair’s contract when they joined forces in 2019.

The 2019 deal, in which M&S purchased half of Ocado’s retail arm for £750 million to create Ocado Retail, allowed the retailer to sell its food products online for the first time and continues to this day.

However, the £190.7 million final instalment was contingent on the business hitting an undisclosed performance target in the year to November 2023. After Ocado reduced the “fair value” of the contingent payment in its accounts and M&S valued the liability at zero, speculation grew over how much would ultimately be paid, according to the Times.

Ocado’s current chief executive Tim Steiner previously threatened legal action if the payment was not made, but sources told the paper that both sides have reached an agreement without any final payment changing hands. “It’s a dead duck,” one person close to the situation told the Times.

The paper has reported that the partnership has faced a fresh setback, however, with M&S refusing to commit to new warehouses or increase volumes at existing sites until Ocado agreed to improved commercial terms.

It is reportedly seeking greater operational efficiencies, improvements to systems, more favourable commercial terms governing how the tech company charges for capacity, and changes to a number of technical agreements, according to the Times.

An M&S spokeswoman told the paper: “We have a good relationship with Ocado. As you would expect, we are in regular discussion, working together to realise the full potential of our partnership. These discussions are positive.”

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