New business would combine the two electricity and gas companies’ 13 million customers
SSE and npower, two of the UK’s biggest energy companies, are planning to combine their household energy supply businesses in a potentially seismic shake-up of the market.
The two firms said they were in well-advanced talks to create a new independent energy supply firm. The new business would combine the nearly 13 million customers they currently supply with electricity and gas.
If the move goes ahead it would see the end of two of the biggest brands in the energy retail market, and is likely to raise competition concerns as the so-called big six that own 80% of the energy market shrinks to the “big five”.
The combination of German-owned npower and UK-listed SSE, Britain’s second biggest supplier, would create a behemoth of a similar size to the current market leader, British Gas.
SSE’s share price jumped by more than 3% as the possible deal was announced.
Both companies have opposed the government’s plans for a price cap on energy prices, which Theresa May has said she is imposing to end “rip-off” standard variable tariffs. Among the big six, SSE has the highest percentage of customers on such poor-value tariffs.
The firms said the new company would be listed on the London Stock Exchange but stressed no final decisions had yet been taken.
“The discussions between SSE and [npower owner] Innogy are continuing and are well-advanced but no final decisions have been taken and no binding agreements regarding the terms of any combination have been entered into,” SSE said in a statement to the Stock Exchange.
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19 December 2018
20 December 2018