Shell Petroleum Company (Shell) will buy 100 per cent of independent energy provider, First Utility. The deal is set to complete in early 2018, subject to “regulatory and other approvals”.
A statement from Shell read: “The Shell group’s energy supply, trading and marketing expertise, combined with First Utility’s experience in serving around 825,000 homes in the UK, will enable First Utility to grow and develop more innovative services for customers.”
Shell said its motivation for the deal was expanding its energy supply business from commercial and industrial customers into the residential sector, which would allow it to bring its products and services to more customers.
First Utility said the sale would allow it to “accelerate growth and develop new innovative customer propositions”, and described Shell as “the ideal business to acquire us”.
Darren Braham, co-founder and CFO of First Utility, said: “This move will help us to capitalise on all the opportunities provided by digitalisation, decarbonisation and the move to battery technology and electric vehicles.”
Mark Gainsborough, Shell’s executive vice president of New Energies, said: “This combination [with First Utility] will enable Shell to enter a new part of the energy market in the UK and to improve choice for customers by delivering innovative services at competitive prices.”
Shell Energy Europe Limited (SEEL), the Shell group’s European gas and power marketing and trading business, will continue to supply wholesale gas and electricity to energy retailers in the UK and Europe, including First Utility.
In 2015, a licensing agreement between Shell Brands International and First Utility meant that First Utility could operate in the German household energy sector under the Shell brand.
After the deal is completed, First Utility will operate as a stand-alone entity and wholly owned subsidiary of Shell within its New Energies division.