The U.K. energy industry was rattled by a possible major acquisition this past weekend.
SSE, one of the country’s Big Six energy suppliers, announced it is flirting with the idea of sending 5.7 million of its customers to Ovo Group.
With the SSE acquisition, which is not yet finalized, 10-year-old Ovo would become a major contender in the region’s deregulated energy market.
In making the announcement, SSE officials stressed the plans to sell their energy services to Ovo is not set in stone.
“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.”The company said.
Acquisition Could Usher in “New Era”
SSE’s energy services have endured some rough patches recently. It experienced a well-publicized loss of about a half a million customers this year.
The company’s pre-tax profits dropped 38% from fiscal year 2017-18 to 2018-19.
Even though there have been talks of selling since May, the recent news about Ovo startled media outlets.
The U.K.’s UtilityWeek called the possible acquisition the “dawn of a new era.” Former Npower CEO Paul Massara told the publication Ovo’s move is “audacious” and that the move is a good idea for companies who have a long-term plan.
The BBC pointed out that SSE’s customer base along with Ovo’s 1.5 million customers would make Ovo’s ratepayer base second in size to British Gas, who has 12 million customers.
At 7.2 million customers, Ovo’s residential customer base would be the same size as U.S. Giants Dominion Energy (7.7 million) and Duke Energy (7.5 million).
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