A Labour government could make challenger brand Ovo Energy “reconsider” its plan to buy big six supplier SSE’s retail arm, a former Npower boss has said.
Ovo has reached an agreement with SSE to buy its retail arm for £500 million.
Following Labour’s manifesto launch yesterday (21 November) in which it promised to nationalise the big six, Paul Massara said while a Labour majority currently seems unlikely, it could be a “brave” move to continue with the transaction if they were to win power.
Speaking to Utility Week, Massara said: “Given Labour’s plans it then could affect everything, I think. It would be a very brave decision to go ahead if there’s that much political risk changing it.
“I think the question is, what’s the probability of a Labour majority? I think it’s pretty hard to see that. It’s much more likely to have some sort of coalition, the way the polls are looking now it looks as though it probably would be a Conservative government.
“You might have a Labour with a Lib Dem (sic), then everything’s up for grabs.”
In the ambitious document titled “It’s Time for Real Change”, the party does not clarify what it classes as the “big six” and whether Ovo would be included within this as a result of its planned acquisition, which is subject to approval from the Competition and Markets Authority (CMA).
Labour is understood to be monitoring the sale but its current position is to nationalise the supply arm of SSE.
The party has previously indicated its intention to bring the energy networks under public ownership.
The UK’s largest energy companies, which currently consist of British Gas, SSE, Eon, EDF, Npower and Scottish Power are undergoing big changes.
As well as the deal between SSE and Ovo, Npower is set to be absorbed by Eon as a result of the major asset swap between the two companies.
Ovo Energy has declined to comment on the matter.