The European Commission has refused to rule out Eon’s planned acquisition of Npower becoming embroiled in the fallout from a no-deal Brexit.
A decision on the acquisition, part of the wider asset swap between RWE and Eon which would see the latter absorb Npower’s customers, was expected towards the end of September, but no hard deadline has been set.
A commission spokesperson said on Friday (16 August) that it would not commit to a decision on the deal being concluded by 31 October, saying it was “very technical”.
Until the UK’s planned departure from the EU on 31 October, the deal does not need separate competition approval from the Competitions and Market Authority (CMA).
An industry source however said it was “inconceivable” that the CMA would not have been asked its opinion by the European Commission.
The source also told Utility Week that Michael Lewis, Eon’s current chief executive, will continue in his role after Npower is absorbed.
A green light from the EU Commission would allow Eon to acquire the majority shareholding of Npower. However, it would still need to then buy up the remaining shares not owned by RWE – a process which it is thought could take anything from three to 12 months.
Eon’s forthcoming acquisition of Npower is the default result of the collapsed merger between SSE and Npower, which fell through last December.
Combining the customer bases of the two suppliers will transform the makeup of the big six and if the much-reported potential deal between SSE and Ovo takes place, the big six will become the big five.
Currently Eon has around 3.8 million customers while Npower has around 3.6 million.
This means that Eon will have a combined total of 7.4 million customers if the deal goes ahead – making it the second largest energy supplier behind Centrica-owned British Gas.
A spokesperson for Eon confirmed the deal was still awaiting the green light from the European Commission, after which there were no more hurdles.
In January, Eon said it did not expect “any material effect” on either the timing or delivery of the major asset swap between itself and RWE following the collapse of the proposed merger.
At the time a spokesperson for German-owned Eon told Utility Week that “no decisions” had been made but that a deal was expected “not before mid-2019”.