Ashurst is advising Wm Morrison Supermarkets plc on its long term agreement with Ocado plc which will enable Morrison.com to commence grocery deliveries to customers in January 2014.

The agreement comprises a technology and services arrangement and a sale and leaseback of property and equipment at Ocado's recently opened Dordon Customer Fulfilment Centre. Morrisons will make an initial capital payment of up to £170 million to Ocado to acquire Dordon and associated mechanical and handling equipment, as well as a licence and a handling fee. A further £46 million will be invested to expand Dordon in order to accommodate Morrisons range, integrate with Morrisons systems and establish a network of delivery spokes. On an annual basis, Morrisons will pay service costs and a contribution to R&D expenditure.

The Ashurst team was led by global head of corporate, Stephen Lloyd. Other team members included corporate partners Adrian Clark and Karan Dinamani, assisted by senior associate Lucy Ward and associate Dominic Ross. Partner Mark Lubbock advised on IP and technology issues, assisted by associate Mark Sweny. Partner Anthony Burnett-Scott advised on real estate matters and antitrust advice was provided by partner Ross Mackenzie.

 Commenting, Stephen Lloyd, said:

"This deal is transformational for both Morrison and Ocado. As a 25 year deal with the potential for extension and with a complex sale and leaseback component, it needs to cater for a number of different potential outcomes whilst in all circumstances preserving the value in the respective businesses. Senior teams on both sides have worked to a challenging deadline to finalise workstreams across a diverse range of disciplines and both clients are delighted with the outcome."

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