UK Watchdog Clears Merger Between SSE and Npower
A merger between two of the UK’s Big Six energy providers has been given the go ahead by the Competition and Markets Authority. Final clearance has been given to the deal between SSE and Npower. This was after the regulating organisation had provisionally cleared the merger back in August.
The Competition and Markets Authority (CMA) had launched a full inquiry at the beginning of the summer after an initial probe into the deal revealed the potential for a reduction in competition which in turn would raise the prices of energy supply for consumers.
However the CMA has been satisfied that energy customers would still retain plenty of choice regarding standard variable tariffs.
Energy Market Not ‘Working Well’ For Loyal Customers
Chairwoman of the CMA, Anne Lambert, confirmed the reasons for the full clearance being granted for the merger by saying,
“With many energy companies out there, people switching away from expensive standard variable tariffs will still have plenty of choice when they shop around after this merger.”
Ms Lambert also spoke about the potential for energy customers who do not switch suppliers to be negatively affected by higher standard variable tariff prices. Ms Lambert continued,
“We know that the energy market still isn’t working well for many people who don’t switch. So we looked carefully at how the merger would affect standard variable tariff prices.
“Following a thorough investigation and consultation, we are confident that SSE and Npower are not close rivals for these customers and so the deal will not change how they set standard variable tariff prices.”
Merger Clearance Welcomed by SSE and Npower
The Chief Executive of SSE Alistair Phillips-Davies welcomed the final clearance for the merger with Npower by saying,
“This is a complex transaction and there is still much work to do in the coming weeks and months.
“However, we’ve always believed that the creation of a new, independent energy and services retailer has potential to deliver real benefits for customers and the market as a whole and it is good to see that the CMA has cleared the transaction following what was a comprehensive and rigorous inquiry.”
SSE and Npower Remain ‘Separate Entities’ For Now
It has also been stated that the merger hasn’t yet been completed, despite the final clearance being obtained. An SSE spokesperson confirmed,
“Until such time as the transaction is complete and the new company lists on the stock exchange, SSE Energy Services and Npower remain entirely separate companies and will continue to compete as normal. Even with CMA clearance in place, competition law continues to apply while we are separate entities.”
It is believed that the two energy providers are aiming to fully merge during the first quarter of 2019, reducing the UK’s Big Six to a Big Five.
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