Ocado’s hire of DixonsCarphone boss Andrew Harrison fuels murmurs of Amazon deal
Ocado has appointed Andrew Harrison, the current deputy chief executive of DixonsCarphone, as a new non-executive director, fuelling ongoing rumours that an acquisition by e-commerce Amazon is on the cards.
Harrison has plenty of experience when it comes navigating the shaky terrain of merging two massive companies, having been at the helm of Carphone Warehouse when it struck the £3.5bn merger deal with Dixons in 2014.
The combined DixonsCarphone is now held up as one of the most successful mega-mergers in recent history, with the combined entity posting strong results in the immediate aftermath. It’s a trend which continues today, with chief exec Seb James saying earlier this weel that he expects full year pre-tax profit for 2015 to be ahead of market expectations after strong sales over Christmas.
Rumours resurfaced earlier this month that Amazon was eyeing a bid for Ocado as it looked to boost the chances of success for its fledgling grocery arm Amazon Pantry, which launched in the UK last November. Amazon is looking to add fresh food items to its line-up but will need to invest in a storage and delivery infrastructure, which a buyout of Ocado could provide.
The benefit for Ocado is that it’s relative size means it simply couldn’t stand up to Amazon’s entry into the grocery marketplace.
However, little was said about Harrison joining the delivery firm, with a press release saying only that he will bring “significant retail and technology experience” and that Ocado would “benefit from his new insight".
Neither Amazon or Ocado have discussed the potential deal, but shares in Ocado have reflected the interest in it going ahead.
Following a Daily Mail Market Report published on 19 January, which suggested Amazon has "advisers beavering away on a potential move for the British online supermarket”, shares in Ocado jumped 18 per cent to £2.85 per share.
On news of Harrisons appointment today (28 January), Ocado shares were up 0.3 per cent.
It will likely be a talking point among analysts in the coming days, with Amazon set to address investors during its fourth quarter earnings call later today while Ocado’s preliminary results will be released next Tuesday, 2 February.