Energy suppliers
Planned merger SSE and Npower

Planned merger SSE and Npower

Planned merger SSE and Npower, isn’t a certainty. Proposed merger will be subject to an in depth investigation because of fears of creating higher household bills.  November 2017 SSE confirmed that it was proposing to merge with Npower. See original report from BBC dated 8 November 2017. http://www.bbc.co.uk/news/business-41912570

 

Npower is owned by the German company Innogy.  It was also announced in March 2018 that they were planning to pass on the ownership of Npower to E-on.  E-on is also a German company with multi national interests.  As E-on is another of the UK’s “Big Six” energy companies this may further reduce competition in the domestic energy market.

 

Competition and Markets Authority (CMA) warned at the end of April it would undertake a fuller probe unless the companies addressed it’s concerns.

Planned merger SSE and Npower

CMA has announced a full scale investigation into the planned merger between SSE and Npower.  CMA said that SSE and Npower had not offered measures to address their concerns. Deadline for the final report is 22 October 2018.

 

https://www.gov.uk/government/news/sse-npower-merger-referred-for-in-depth-investigation

 

Both companies disagree with the CMA findings and believe the merger will be good for competition.  They believe the proposed merger between energy suppliers SSE and Npower will create an independent, customer-focused company.  “It will offer customers a more efficient, improved service – and bring benefits to the wider market as well.” Innogy said in an emailed statement in Reuters.

 

https://uk.reuters.com/article/uk-sse-innogy-cma/uk-watchdog-launches-in-depth-probe-of-sses-npower-merger-idUKKBN1I90LZ

 

SSE is currently the second biggest domestic energy supplier in the UK behind Centrica which owns British Gas.  As a result, the combined company, if it went ahead would have 11.5 million customers. British Gas currently has over 14 million.

Planned merger SSE and Npower

A big concern for the CMA is the impact of the merger on standard variable tariffs.  The government has legislation currently going through parliament to cap these tariffs.  Within the Big Six energy suppliers SSE has the highest proportion of customers on Standard variable tariffs.

 

Several leading news sources have recently reported on this story.

 

Guardian

https://www.theguardian.com/business/2018/may/08/npower-sse-merger-investigation-competition-cma-energy-bills

 

Financial Times

https://www.ft.com/content/c5d9e35c-5289-11e8-b24e-cad6aa67e23e

 

Independent

https://www.independent.co.uk/news/business/news/sse-npower-competition-markets-authority-investigation-gas-electricity-bills-a8340781.html

 

Sky News

https://news.sky.com/story/in-depth-competition-probe-for-big-six-energy-tie-up-11363652

 

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