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E.ON agrees to buy Ovo in deal to create UK’s biggest energy supplier
TL;DR
E.ON has agreed to acquire UK energy supplier Ovo, creating the largest energy supplier in Britain with 9.6 million customers. The deal, estimated at £600m, aims to lower bills and awaits regulatory approval.
Key points
- E.ON agrees to buy Ovo, creating UK's largest energy supplier
- Combined company will serve about 9.6 million customers
- Deal estimated at £600 million
- Existing tariffs will be honored and service will remain unchanged
- Regulatory approval expected in the second half of the year
Mentioned in this story
E.ONOvoOctopus
The German energy group E.ON has agreed to buy struggling UK rival Ovo in a deal that would create Britain’s biggest gas and electricity supplier.
The combined company will serve about 9.6 million customers, overtaking the market leader, Octopus, which serves almost 8m households in the UK.
The value of the deal was not disclosed, but reports have estimated it at £600m. E.ON said the takeover represented a significant investment in the UK market and would bring bills down for customers.
It said there would be no changes at its domestic energy supplying arm E.ON Next, nor at Ovo, while it awaited regulatory approval for the deal, stressing “existing tariffs will be honoured in full and service will continue unchanged”. Clearance of the acquisition is expected in the second half of the year.
E.ON did not comment on what the deal could mean for jobs. It is understood that once it has been completed, the German supplier will establish a transformation office to develop the integration plans. It believes that a larger customer base enables faster investment in technology, products and services, which will benefit customers and support the energy transition.
Ovo, the UK’s fourth-largest gas and electricity supplier, said it had also agreed to sell its home services business, which provides boiler insurance and boiler servicing, to Hometree.
E.ON has about 5.6 million customers in the UK, while Ovo, which was founded in 2009 by the green energy entrepreneur Stephen Fitzpatrick as a challenger to the big six energy companies, has 4 million.
Fitzpatrick said the energy market had changed a great deal: “Energy retail is now more regulated, more capital intensive and increasingly dependent on long-term investment and scale. In that context, bringing Ovo together with E.ON is the right next step for customers, for colleagues and for the long-term commitment that decarbonisation requires.”
In 2019, Ovo became the UK’s then second-biggest energy supplier after it agreed to buy SSE’s home energy business in a £500m deal that challenged the dominance of the big six energy suppliers.
Q&A
What is the estimated value of E.ON's acquisition of Ovo?
The estimated value of E.ON's acquisition of Ovo is £600 million.
How many customers will the combined E.ON and Ovo serve?
The combined company will serve approximately 9.6 million customers.
What will happen to existing tariffs after the E.ON and Ovo merger?
E.ON has stated that existing tariffs will be honored in full and service will continue unchanged.
When is regulatory approval for the E.ON and Ovo deal expected?
Regulatory approval for the deal is expected in the second half of the year.
