CMA mulls investigation into Ovo’s £500m acquisition of SSE’s retail arm
The competition watchdog has said it is mulling an investigation into Ovo energy’s acquisition of SSE’s retail business.
The Competition and Markets Authority appealed for comments on the proposed deal by November 6.
The regulator said it is considering whether the move would result in “a substantial lessening of competition” in the UK energy market.
Ovo, which was launched 10 years ago, is the UK’s largest independent energy supplier with 1.5 million customers and 2,000 employees.
But the company’s £500 million acquisition of the SSE Energy Services will provide the business with a further 3.5 million customers and 8,000 staff.
The acquisition by Ovo had been expected to complete by the end of 2019.
SSE said it will do “all it can to ensure a smooth transition for customers and employees”, should the deal get the go-ahead from regulators.
Ovo has agreed to use the SSE brand under licence for a period of time while it transfers over the bought business.
The deal came after SSE announced in May that it planned to offload its energy services division after more than 500,000 households switched to a new supplier in the year to April.
In November 2018, SSE called off a merger of its household supply arm with rival Npower, blaming “very challenging market conditions”.
Gas and electricity suppliers have come under intense pressure in the UK following this year’s introduction of the cap on standard variable tariffs, as well as increasing competition from a swathe of smaller players.