A £500 million deal which will see Ovo Energy acquire the retail arm of SSE will be completed today (15 January).
The deal, which was announced last September, marks challenger brand Ovo’s step up to become one of the largest players in the market, now serving almost 5 million customers.
A transition period will follow the acquisition and both companies will collaborate on a more detailed plan on how to bring the two businesses together to create one unified team.
In the meantime SSE’s customers’ payments and tariffs will not change.
A spokesperson for Ovo told Utility Week the acquisition includes the customers, operations and around 8,000 employees of SSE Energy Services. Individuals and teams will continue to work as usual and nothing will change for the time being.
They added that Ovo had 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”.
Ovo was founded in 2009 by its chief executive Stephen Fitzpatrick as a challenge to the big six energy suppliers.
In 2018 its retail business received a £200 million cash injection from the Mitsubishi Corporation for a 20 per cent stake, valuing the company at £1 billion.
Fitzpatrick said: “Today is an exciting day. It marks the end of one chapter for Ovo but, more importantly, the beginning of the next one together with SSE Energy Services.
“We started Ovo with a bold ambition to do better for customers and have stayed true to that vision ever since.
“We have an integration plan that leaders from both companies have collaborated on since September. There is a lot of work to do to bring the two businesses together, but we have a really strong combination of great talent, technology and customer centricity that will enable us to succeed.
“SSE’s history of excellence at scale combined with Ovo’s innovative technology and our Plan Zero commitments mean that together, as one team, we can bring millions more people with us on our journey towards zero carbon living.”
Writing in a blog on SSE’s website, Alistair Phillips-Davies said the company’s strategic focus is now on developing, building and maintaining low carbon assets and infrastructure.
He said: “From onshore wind farms in the north of Scotland to building the world’s largest offshore wind farm off the coast of Yorkshire at Dogger Bank, SSE has expanded to become one of the UK and Ireland’s largest renewable developers. We have an enviable growth pipeline in offshore and onshore wind.
“At the same time, our electricity networks have been investing in the pylons and wires transporting renewable energy, from the wettest, windiest and sunniest parts of Britain to power millions of homes and businesses across the country.
“Our transmission business has a strong business plan and our distribution business has a huge role to play in the electrification of the economy.
“And we have grown a range of complementary businesses which will help the transition to net zero by 2050. From low carbon thermal to Enterprise and our customer solutions businesses, we have a range of growth options for the future.”
Speaking during an interview with Utility Week last November, Ovo Energy’s chief executive Adrian Letts outlined his vision for the company.
“From a retail standpoint our vision is very much providing and powering progress to clean and affordable energy through technology. We have released Plan Zero and we have set out our course to measure the success of our business against carbon reduction. Most importantly, how can we halve our customers’ carbon footprint by 2030?
“The vision of the business is very much, how do you create and integrate a proposition to help customers do that? Both supplying them cleaner energy but also helping them understand the impact of their household consumption on their carbon footprint. That is, I think, going to be driven through providing them with the right information and tools and then the right technology to allow them to do that.”
You can read the full interview with Ovo Energy’s chief executive Adrian Letts here