Sseintalks over new UK household power firm

SUPPLY: Utility’s board has held ‘advanced’ talks with npower UK owner innogy SE

Shares in Perth utility company SSE jumped yesterday after it revealed it was in talks with German giant innogy SE over setting up a new powerhouse UK energy supply company.

A move to combine SSE’S existing household gas and electricity business with innogy’s npower business in the UK would create a new dominant player in the British domestic marketplace with almost 13 million customers.

Innogy booked a half-year loss for npower in August, while the previous month SSE revealed it had lost another 230,000 customer accounts as a result of households switching away from the Big Six to cheaper rivals as it blamed a “highly competitive” market.

Investor sentiment to a potential combination was positive, with SSE stock pushing 3.5% ahead within 90 minutes of the announcement to the London Stock Exchange.

Other than being a listed entity in its own right, no details were immediately available of how the new business would be structured, where it would be located or how its creation would impact on the current household gas and electric supply operations of SSE or Swindonbased npower.

SSE remained “mindful” of both customers and employees as talks progressed and said the outcome of the discussions would be communicated once clear. However, it stressed there was no guarantee the two companies would reach agreement.

“In line with its stated commitment to embrace change in each of its businesses, adapting them to the political, economic, social and technological requirements of customers and of society as a whole, the board of SSE plc has been in discussions with innogy SE about creating a new independent energy supply company to which would be contributed: SSE’S household energy supply and services business in Great Britain; and innogy’s household and business energy supply business in Great Britain,” SSE said in a statement.

“The discussions between SSE and innogy are continuing and are welladvanced but no final decisions have been taken and no binding agreements regarding the terms of any combination have been entered into.

“Any proposal to form a new company combining the businesses described above would be subject to the customary regulatory approvals, and approval of the transaction by SSE plc shareholders.

“The combined business would be listed and SSE would demerge its shares to its shareholders.”

Shares in SSE closed up 2%, or 36p, at 1,410 yesterday.

business@thecourier.co.uk

Picture: Ben Gold. An SSE technician talks a household customer through a new boiler installation.