Co-op Energy has said the completion of its acquisition of Flow Energy is “an opportunity to grow the co-operative movement within energy”.
The £9.25 million sale of the struggling supplier which went through this week following a meeting of Flow Energy’s shareholders, will see its 130,000 customers remain with a separate brand, under its own licence and with its own tariffs, as part of Co-op Energy. It was conditional on a revised supply agreement with Shell.
Welcoming Flow Energy’s customers and colleagues into the “The Midcounties Co-operative family”, Co-op Energy chief executive David Bird said: “This gives us the opportunity to further grow the co-operative movement within energy, and continue to strengthen our support for renewable, community-owned energy production in the UK.”
Britain’s largest member-owned, dual-fuel energy supplier employing 500 people and with a 320,000 customer base, has pledged it will be business as usual for Flow Energy’s customers and colleagues under the move, which represents a major mid-market merger in the UK’s domestic energy market.
Bird added: “We will share more of our plans to extend our co-operative values to a larger audience in due course.”
News of the proposed acquisition in April had followed considerable market speculation about Flow Energy’s future.
In 2017 the struggling retailer had indicated it was considering disposing of its retail unit to focus more heavily on its smart boiler business in Europe – a decision it subsequently reversed after a US-based investor offered funding to help turn the business into a “viable” challenger brand.
However, in a recent stock exchange statement its parent company Flow Group confirmed that, despite significant progress since then, “the headwinds facing challenger suppliers” in the UK had “continued to strengthen”. Price regulation and aggressive pricing strategies by new market entrants were singled out as particular challenges.
Co-op Energy is no stranger to an influx of new customers, after taking on 160,000 customers in 2016 from GB Energy when the small retailer went bust.
The Flow Energy sale, agreed by 58.8 per cent in favour against 41.2 per cent against, attracted controversy this week from some disgruntled shareholders and lenders who suffered heavy losses.