SSE and Npower have welcomed the Competition and Market’s Authority’s provisional approval of the proposed retail merger between the two big six companies.
The CMA announced this morning (30 August) that it has “provisionally found” the proposed merger between the big six suppliers SSE Retail (SSE) and Npower “does not raise competition concerns”.
Martin Herrmann, chief operating officer retail of Innogy SE, Npower’s parent company, said: “Our plans for a new British retail energy company are clearly on schedule and today’s announcement, that the UK Competition and Markets Authority has given provisional clearance to the planned merger, is another important milestone.
“We believe that the new organisation will combine the best from both companies to meet evolving customer expectations and address advancing market challenges.”
Alistair Phillips-Davies, chief executive of SSE, said the merger presents a great opportunity to create a more “agile, innovative and efficient company”.
He said: “Following a thorough and in-depth investigation, we are pleased the CMA has provisionally concluded that the proposed merger of SSE Energy Services and Npower does not raise competition concerns.
“The scale and pace of change in the GB energy market continues to be significant and requires us to evolve to stay relevant, competitive and sustainable. The planned transaction presents a great opportunity to create a more agile, innovative and efficient company that really delivers for customers and the energy market as a whole.
“We look forward to continuing to engage with the CMA as it prepares its final report ahead of the statutory deadline in October. We remain confident that the formation and listing of the new company is on track for completion by the end of SSE’s financial year.”
Gillian Guy, chief executive at Citizens Advice, said: “It’s important that SSE and Npower manage this merger in a way that works well for their customers.
“Merging two billing systems and customer service platforms is a complicated process that has the potential to cause disruption for people. SSE and Npower must make sure that customers’ needs get the attention they deserve, by getting the practicalities right.”
Shareholders voted in favour of the merger on 19 July, after SSE’s chairman Richard Gillingwater said the move has “strong strategic logic”.
The new combined retail company will be listed on the premium segment of the London Stock Exchange and will not be controlled by either Innogy or SSE.
Innogy will hold a minority stake of 34.4 per cent in the combined retail company and SSE will demerge its stake of 65.6 per cent to its shareholders upon completion of the transaction.
Subject to final approval, the completion of the transaction and the listing of the new retail energy company are expected to occur in the last quarter of 2018 or the first quarter of 2019.
Katie Bickerstaffe has been appointed chief executive of the new retail company and is expected to take up her appointment on 24 September.
Bickerstaffe has previously served as a non-executive director of SSE for seven years. She was chief executive of the UK and Ireland division of multinational electrical and telecommunications retailer Dixons Carphone until April 2018 – a role she held since 2015.
Meanwhile Gordon Boyd, who has held senior finance leadership positions at utilities including British Energy and EDF Energy, took up the position of chief financial officer on 4 July.