Google plans takeover of Tesco’s customer data arm Dunnhumby
Fri 19 Jun 2015
Google is looking at putting in a bid to acquire Dunnhumby, the company behind Tesco’s loyalty Clubcard scheme.
The tech giant is reportedly considering a partnership with British private equity firm Permira to help them launch the bid. Google Capital, Google’s venture team, is interested in Dunnhunby’s advanced data analytics experience and loyalty programme nous.
Dunnhumby, which was bought outright by Tesco in 2004, collects and analyses data from around one billion customers globally. It tracks shopping habits to build customer profiles and target them with relevant offers. The analytics also helps brands with advice on advertising, pricing, product launches, store openings and promotion planning. Other clients include Unilever, Nestle, Procter & Gamble, Shell and Coca-Cola.
Critics have argued about the intrusive nature of consumer data gathering and the related privacy concerns. “Consumers are being tracked every minute of every day – when you use your credit card, your loyalty card, when you browse the web, when you use a smartphone app, when you shop online – the list is endless,” said Justin Basini of anti-junk marketing business ALLOW.
The 26 year-old data company, which employs over 3,000 staff worldwide, is currently valued at up to £2bn – a sale which would help rebuild the retailer’s balance sheet considerably after a stream of profit scares and the discovery of a £263mn ‘black hole’ in its finances.
There are thought to be at least 10 potential buyers in the shortlist, including WPP and the U.S. private equity group Hellman and Friedman. Tesco is yet to confirm how it will sell the business, which has offices in around 30 countries, but says that a decision will be made as the offers come in.
Tesco appointed consultancy Goldman Sachs at the beginning of the year to manage a strategy for selling off Dunnhumby. The supermarket chain is also discussing selling its £6bn South Korean arm.