The Woolworths Group Ltd (ASX: WOW) share price is trading lower on Tuesday despite the release of an announcement.
At the time of writing, the retail conglomerate's shares are down 0.5% to $41.81.
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What did Woolworths announce?
This morning Woolworths announced that it is investing $223 million to increase its stake in Quantium from 47% to 75%.
Woolworths describes Quantium as a world-class data science and advanced analytics business.
Woolworths originally acquired 50% of Quantium in 2013 for a lowly $20 million. That acquisition led to the two parties entering into a long-term partnership that has enabled Woolworths and its supplier partners to make customer-first decisions across pricing, ranging, and promotions.
Since then, Quantium has experienced exponential growth both in Australia and internationally. This led to a significant increase in its valuation since its orginal investment.
Woolworths' Chairman, Gordon Cairns said: "We have long admired the Quantium business. We have enjoyed a successful partnership with them over the last eight years by jointly developing products and services that provide critical insights to both Woolworths Group and our suppliers, helping us put our customers first in our decision making."
This sentiment was echoed by Woolworths' CEO, Brad Banducci.
He commented: "Advanced analytics is key to improving the experiences, ranges and services we provide to our customers and the support we provide to our teams and suppliers. The way we gather data, interpret it, and protect it, is becoming ever more important."
"Through this transaction, we aspire to bring together Quantium's advanced analytics capability and Woolworths Group's retail capabilities to unlock value across our entire retail ecosystem. By working better together, we aim to transform the rapidly evolving retail sector, helping us better service our customers and support our team and supplier partners," Mr Banducci added.
What now?
Following the completion of the transaction, Quantium will form part of Woolworths Group, and a new business unit called Q-Retail will be established.
Q-Retail will bring together Quantium and Woolworths Group's collective data science and advanced analytics capabilities with a focus on delivering against the company's advanced analytics aspirations.
Leading Q-Retail will be Amitabh Mall as Managing Director. He will also serve as Woolworths Group's Chief Analytics Officer. Mr Mall joins the company after 20 years at the Boston Consulting Group where he most recently led their Consumer and Retail practice in Asia-Pacific.
