Innogy chief executive Peter Terium has insisted the price cap was not the reason for the merger of its UK energy supply business Npower with SSE’s domestic retail arm, although he admitted it “might have pushed it a bit quicker”.
During a press conference call, Terium told journalists the timing is “irrespective of the price cap interference”.
“The timing is driven by the fact that we have done our internal homework,” he said. “We have our systems up and running, we are gaining customers again, we now have a business which is operating and will be more successful in the future – that is what has driven the exact timing of this, and that luckily fit together with the strategic review that SSE has done.”
He added that, normally discussions of this nature take “quite some time”, and “a lot of things have happened” since negotiations began.
Terium refused to comment on what the merger would mean for employees, but did imply that it would create “synergies”. If these synergies would have an impact on employees, he said, representative bodies on the employee-side would be informed.
Terium also insisted that the merger is not an “exit before Brexit”. “We have a very strong UK renewables business, and we intend to further expand this business, in particular to investments in new wind projects,” he said.
SSE and Innogy today announced that they have agreed to merge Npower with SSE’s household energy and energy services business to form a new independent retail energy company.
The new company will not be controlled by either Innogy or SSE. Innogy will hold a minority stake of 34.4 per cent in the business, while SSE plans to demerge its 65.6 per cent stake to its shareholders upon completion of the transaction.
Terium said in a press statement that the competitive landscape and the uncertain political environment for energy retailers in the UK mean “Npower would be better-placed to offer value to our customers and our shareholders as part of a new company, with the ability to succeed in the face of the challenges that lie ahead”.
News of the merger follows confirmation of a government cap on retail energy prices.