Big six supplier SSE is in talks with challenger brand Ovo Energy over the possible sale of the energy giant’s retail arm.
A successful deal would see Ovo become the UK’s second largest energy supplier with 7 million customers, behind Centrica-owned British Gas.
SSE, which has 5.7 million energy customers, says it is “actively progressing” a number of options for the future of SSE Energy Services, following the collapsed merger with fellow big six supplier Npower.
A spokesperson added: “These discussions are continuing, however no final decisions have been taken and no agreements regarding the terms of any transaction have been entered into.
“The board remains focused on securing the best long-term future for the business, its customers and employees, and for shareholders.
“SSE will provide no further comment on the discussions until a conclusion to them has been reached.”
Ovo declined to comment on the matter.
SSE’s retail business has been under increasing pressure in recent months, with the company reporting a loss of 70,000 customers between 31 March and 30 June this year.
In its preliminary results released in May, the company reported an 8 per cent drop in customer accounts to 6.25 million.
The merger between SSE and Innogy-owned Npower was called off shortly before Christmas 2018 after the two companies were unable to reach an agreement on the terms of the deal.
“Adverse developments” in the retail market and “regulatory interventions” such as the price cap were cited as reasons behind the decision.