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Marks & Spencer is to launch its home delivery service for the first time after confirming a deal to buy a 50% stake in Ocado. 

Marks and Spencer will pay £750 million to take the stake in the delivery service. Ocado will deliver M&S food from September 2020 at the latest when its deal with Waitrose ends.

The venture will be named Ocado, and it will see Ocado offer its own label products as well as big brands.

Marks & Spencer chief executive Steve Rowe said: “We think we’ve paid a fair price. This is something that will scale our business and frankly it’s the only way we could have gone online within an immediately scalable, profitable and sustainable business.”

Ocado currently sells 4,500 Waitrose products, and its founder Tim Steiner told the BBC the new deal will see it sell more Marks & Spencer products. Ocado currently pays £15m in sourcing fees to Waitrose.

Marks & Spencer said it will sell £600m worth of shares in order to fund the deal, and reduce its shareholder dividend by 40%.