Millions switched to new energy firm...but will bills get cheaper?

MILLIONS of energy customers are to be switched from SSE after it was bought out in a £500million deal.

Ovo is set to become Britain’s second largest gas and electricity provider after taking over larger Scottish rival SSE’s household supply arm.

The takeover will see Ovo add SSE’s 3.5million households to its existing 1.5millionstrong customer base, catapulting it into the Big Six and second only to British Gas.

Around 8,000 staff working for the SSE energy services unit will transfer to Ovo, which currently employs about 2,000 people.

SSE (formerly Scottish and Southern Energy) said it would do ‘all it can to ensure a smooth transition for customers and employees’, should the deal get the go-ahead from regulators. It is expected to be completed later this year or early in 2020.

The news was welcomed by consumer organisations, who hope that increased competition will lead to a fairer market.

Dr Jamie Stewart, energy spokesman for Citizens Advice Scotland (CAS), said: ‘This deal brings to an end a period of uncertainty for SSE customers, but is only the start of a complex transition process.

‘Our message to customers is that you will be contacted by both companies and the transition should not affect your bills.’

CAS officials said it hopes to meet Ovo to ensure consumers’ interests are protected. Shares in Perth-based SSE rose 2 per cent after the deal was announced.

Ovo founder and chief executive Stephen fitzpatrick said: ‘There’s a lot of work to do but it feels like, for us, this is the start of a new, exciting chapter.’

While it will make Ovo one of the UK’s largest energy suppliers overnight, it will also see it take on a business that has been struggling. In May, SSE, the third-largest UK supplier, announced plans to offload its energy services segment after more than half a million households switched to new suppliers in the year to March.

SSE chief executive Alistair Phillips-Davies said: ‘We have long believed that a dedicated, focused and independent retailer will ultimately best serve customers – and this is an excellent opportunity to make that happen.’

Stephen Murray of MoneySuperMarket said: ‘Today’s announcement will enhance competition for customers.’

Ovo sold a 20 per cent stake to Mitsubishi earlier this year.