SSE and Innogy in talks to combine supply businesses
Negotiations are “well advanced” although no final decisions have been made
SSE and Innogy have entered talks about merging their supply businesses into a new separate company.
Both companies have today (7 November) published stock market updates stating that negotiations are “well advanced” although no final decisions have been made.
SSE said it is “mindful of the requirements of customers and the concerns of employees” and will disclose the outcome “as soon as they are concluded”.
In the meantime, the company “will not be commenting further on any aspect of the discussions”.
It added that any deal would be “subject to the customary regulatory approvals, and approval of the transaction by SSE plc shareholders".
"The combined business would be listed and SSE would demerge its shares to its shareholders," it added.
The statements follow reports earlier this week that both SSE and Innogy were considering selling their supply businesses to enable them to focus on networks and renewables.
A source quoted by Reuters said the management at Innogy are “no longer willing to accept the losses” from its retail arm Npower. The Telegraph was told separately that, with the government proposing a cap on energy bills, SSE executives viewed their supply business as “more trouble than it’s worth”.
The chief executive of Octopus Energy, Greg Jackson, said: “This clearly strengthens the need for government action on pricing in energy.
“Both of these companies are ones with questionable customer records - NPower has the highest standard variable tariff (SVT), and SSE have the highest proportion of customers on SVTs.
“Further, SSE’s letter to the secretary of state yesterday, apparently promising to move customers off SVTs onto ‘equivalent or lower fixed tariffs’ without mentioning what these tariffs would be, was evidence that they intend to carry on exploiting customer disengagement, and this move will simply create an enormous list of such customers," added Jackson.
- Ofgem rejects subsea power line for Shetland Islands Diesel plant will remain open until 2025 after EU emissions limits relaxed
- British Gas sheds 823,000 customers in three months Shares plunge to 14-year low following third quarter trading update
- Thames Water in transparency overhaul Ian Marchant, former chief executive of SSE will take over as chairman in January