The competition watchdog is assessing whether the proposed merger of SSE and Npower, the energy suppliers, could be affected by the sale of Npower’s parent to a rival. Npower is owned by Innogy, which is majority-owned in turn by RWE. RWE said over the weekend that it planned to sell its stake to Eon, its fellow German utility, as part of a multibillion-dollar asset swap. Analysts at Jefferies said that Innogy’s takeover by Eon, which also has a substantial British household supply business, could “complicate” the merger between SSE and Npower and may make regulatory approval more complex. The SSE and Npower deal, which was announced in November, would represent the biggest shake-up of the British energy sector in years, consolidating its “Big Six” into a Big Five. The two retail operations would combine as a new listed independent supplier majority-owned by SSE shareholders and 34 per cent-owned by Innogy. The new company would serve about seven million households, making it the biggest household electricity supplier and the second-biggest gas supplier. However, now the Competition and Markets Authority is understood to be speaking to all of the companies involved to see what impact the Innogy deal could have on the proposed merger of Npower, the British-focused retail division, with SSE’s household supply business.
Times 13th March 2018 read more »
Energy suppliers SSE and Npower have insisted that their “big six” mega-merger will power ahead despite the £38bn German energy utility tie-up which risks entangling the deal in fresh competition concerns. The big six pair both shrugged off fears that a complex deal between German energy giants RWE and Eon, which emerged over the weekend, would derail their plans to create Britain’s second largest energy supplier. The complicated German deal has sparked fresh concerns within the Competition and Markets Authority (CMA) because it includes RWE’s spin-off business Innogy, which is also Npower’s parent company. Through a series of asset swaps the deal would effectively hand Eon, which operates big six supplier Eon UK, a one third stake in the new SSE-Npower rival. Innogy is understood to have been caught off-guard by the agreement struck by its parent company RWE over the weekend, but sources believe the company may already be developing contingency plans to steady the deal with SSE. Innogy is understood to be anticipating calls from the CMA to sell-off its stake in Npower once the new company has been created, and before the Eon-RWE deal completes. It could also waive its rights to take up two seats on the board of the new British supplier.
Telegraph 12th March 2018 read more »