SSE and Npower call time on retail unit merger
The two UK energy suppliers have put a stop to their planned merger after failing to reach agreement on ‘revised commercial terms’, with SSE continuing to explore other options for its retail business.
SSE and Npower have decided to put an end to their retail unit merger talks after the two companies failed to reach an agreement over revised commercial terms.
SEE offered several reasons for the deal falling through, including an inability to offer sufficient financial support the newly combined entity and shifting energy market conditions.
‘This was a complex transaction with many moving parts,’ CEO of SSE Alistair Phillips-Davies ‘We closely monitored the impact of all developments and continually reviewed whether this remained the right deal to do for our customers, our employees and our shareholders.’
‘Ultimately, we have now concluded that it is not,’ he added. ‘This was not an easy decision to make, but we believe it is the right one.’
SSE explores alternative options for retail unit
After scrapping the deal with Npower, SSE said that it will explore other options for its retail unit, with the company considering a spin-off or straight sale of the business.
‘SSE Energy Services remains a profitable business with a strong track record, a customer-centric culture and an excellent team that has enabled it to be a market-leader for many years,’ Phillips-Davies said. We will build on this while continuing with separation activity in preparation for its long-term future outside the SSE group.’
‘We are now exploring all the available options with a view to delivering this future in the best possible way,’ he added.
Big six suppliers remain
The planned merger, had it gone ahead, would have seen the two UK energy suppliers combine their respective retail units in a move that would reduce the country’s big six energy providers to five.
The deal initially raised eyebrows at the UK Competition and Markets Authority (CMA) but was eventually cleared by the regulator after it concluded that homeowners would still have ‘plenty of choice’ on standard variable tariffs (SVTs).
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