The Competition and Markets Authority (CMA) has approved Ovo Energy’s £500 million takeover of SSE’s retail arm.
Concerns were initially raised that the deal would harm competition, but the regulator has now officially given the green light to the deal, which will create the UK’s second-largest energy supplier.
SSE, which is one of the UK’s ‘Big Six’ energy suppliers, agreed to sell its retail arm, Ovo, for a deal which is worth £400 million in cash, and £100 in loans.
Stephen Fitzpatrick, Chief Executive of Ovo, said: “We’re delighted with the CMA’s decision and look forward to bringing SSE into the Ovo family.
“There is a lot of work to be done, but we’re excited about the challenge ahead and the opportunity to help even more customers on the journey to zero carbon.”
The merger is a significant expansion for Ovo, which is currently the UK’s largest independent energy supplier. The deal, which is expected to be finalised in January 2020, will see Ovo take over SSE’s 3.5 million customers, and take on around 8,000 employees.
Ovo Energy, which was founded 10 years ago, currently has 1.5 million customers, with the merger set to increase their customer base to approximately 5 million.
Nigel Fry, General Practice Partner at Milsted Langdon, said: “It will be intriguing to see how this merger develops, with Ovo Energy set to triple their current customer base. However, the fact that the CMA has approved the deal without the need for a phase-two investigation shows that they are confident that the deal does not lessen competition in the marketplace.
“For advice on matters relating to mergers and acquisitions, contact our expert team at Milsted Langdon today.”