Ovo Energy, the biggest UK independent energy supplier, has purchased Southern and Scottish Electric (SSE) and merged to create what will become the second-largest energy supplier in the UK.
SSE, which is listed on the London Stock Exchange as part of the FTSE 100, will sell its retail business for £500m to the Bristol-based Ovo, who until now has been kept out of the famous Big Six energy retailers.
Ovo, which currently has 1.5m customers and 2000 employees, will take on SSE’s 3.5m customers and 8000 staff to make them the second-biggest energy company in the UK, after British Gas.
Phased Transfer Through 2019 And 2020
SSE has announced that the changeover will likely take place in late 2019 to early 2020 and will be a phased transfer so as to limit the disturbance to both staff and customers.
It also confirmed that there should be no immediate issues for their combined customer base after the deal was secured and that the use of the SSE brand would be done through a phased introduction over the beginning of 2020.
Many see this new merger as a sign of the increasing dominance of independent energy suppliers throughout the United Kingdom, who have continued to challenge the Big Six as customers have transferred to their services over the traditional suppliers.
SSE Weakness
The deal comes in the wake of troubles for SSE, who announced plans earlier this year to offload its energy services division after it was found that around half a million households had switched to another energy supplier from them.
Representatives from the firm announced that the company would attempt to sell or float its energy services departments at the back end of 2020.
It’s also not the first time SSE has attempted to merge, in 2018, a proposed deal with fellow Big Six supplier Npower was called off.
Ovo Energy started in 2009 and has been growing quickly over the last few years. In 2018, they acquired Spark Energy, one of their biggest competitors, and were valued at £1bn by the Mitsubishi Corporation, who owns a 20% share in the company.