Ovo Energy has confirmed it will keep the SSE master brand licence following the planned acquisition of SSE’s retail arm.
One industry analyst has raised questions over the branding of the new company and highlighted the fact that SSE’s customers are “very loyal” to its Swalec, SSE, and Scottish Hydro brands.
Rik Smith, energy expert at Uswitch.com, said: “The good news for consumers is that the two existing companies have a good track record of treating customers well.
“Where they go with their prices remains to be seen, but there are also questions about the brand name that will be on people’s bills in future. SSE customers are very loyal to its Swalec, SSE, and Scottish Hydro brands in various parts of the country.
“Ovo is also known to be at the forefront of new technology such as electric vehicle charging and smart meters, and buying the current second largest supplier in the country means there is a huge opportunity for them to expand further in this area.”
However an Ovo spokesperson said: “If this transaction goes ahead, the leadership teams from both companies will be working together to plan carefully how SSE is brought into the Ovo family and onto its systems and platforms.
“Ovo has negotiated rights to use the SSE master brand under licence for a transitional period, and acquired regional brands as part of this transaction and intends to maintain them for the immediate future. We won’t have any further update at the moment due to regulatory approval.”
The £500 million deal will see Ovo become the UK’s second largest energy supplier, behind Centrica-owned British Gas.
In response to the deal, Stephen Murray, energy expert at MoneySuperMarket, says the announcement will enhance the “ever-growing competition for customers”.
Murray said: “It’s well known that SSE has been looking to offload its retail energy arm for a while, so today’s news comes as no surprise. Its planned merger with Npower fell by the wayside at the end of last year and in Ovo it now seems to have found a potential solution.
“The likes of Ovo, Shell, Bulb and Octopus mean there’s a base of emerging suppliers who are continuing to challenge the big six in the domestic energy market and can fill the void left by SSE deciding to focus on other parts of its business.”
Meanwhile Peter Earl, head of energy at Comparethemarket.com, said: “From plucky start-up to industry giant in the space of a decade, this deal will see independent Ovo become one of the UK’s big six energy providers.
“The question for energy customers is whether this deal will shake up competition in the market or stifle it. Ovo and SSE combined serve a game-changing 5 million customers in the UK, and news of this deal may spark concern among SSE customers that their energy bills could rise now they are with a new supplier.”