Ovo has announced today that it has agreed a deal to take over SSE’s retail division to create the UK’s second biggest household energy supplier.
Ovo is paying a cool £500 million and the takeover is expected to go through later this year.
The biggest supplier is still British Gas with about 10 million customers, now Ovo with 5 million, and E.ON come third with 4.3 million. There are about 70 suppliers in what is an increasingly competitive market.
David buying Goliath
This is a real David buying Goliath moment. Ovo only started up in 2009.
Known for being tech savvy, bundling green electricity into their tariffs and having high customer service ratings, they have shown themselves to be one of the most dynamic companies in the UK energy market.
Spearheaded by thrusting CEO, Stephen Fitzpatrick, Ovo have sponsored Formula E motor racing, in which all electric Formula 1 style cars race, and the Tour of Britain cycling, and grown from nothing to five million customers in just ten years.
What the Bosses are Saying
Stephen Fitzpatrick, CEO and Founder of OVO said:
“This transaction marks a significant moment for the energy industry. Advances in technology, the falling cost of renewable energy and battery storage, the explosion of data and the urgent need to decarbonise are completely transforming the global energy system.
“For the past three years OVO has been investing heavily in scalable operating platforms, smart data capabilities and connected home services, ensuring we’re well positioned to grow and take advantage of new opportunities in a changing market.
“SSE and OVO are a great fit. They share our values on sustainability and serving customers. They’ve built an excellent team that I’m really looking forward to working with.”
Alistair Phillips-Davies, Chief Executive of SSE, said:
“We have long believed that a dedicated, focused and independent retailer will ultimately best serve customers, employees and other stakeholders – and this is an excellent opportunity to make that happen.
“OVO shares our relentless focus on customer service and has a bold vision for how technology can reshape the future of the industry. I’m confident that this is the best outcome for the SSE Energy Services business.
“Following the transaction, SSE will be able to give an even greater focus to delivering the low carbon infrastructure needed to help the UK reach net zero emissions.
“We have a clear strategy around developing, operating and owning renewable energy and electricity network assets, along with growing businesses complementary to this core.
With a large and growing renewable energy pipeline and a leading position in the electricity networks needed to deliver low-carbon energy reliably to homes and businesses in an increasingly electrified economy, we are well placed to create value from the low-carbon transition.”
Mark Todd co-founder of energyhelpline has commented:
“Ovo is expected to bring a fresher more tech savvy approach to the SSE business, which should mean updated services for its customers.
“We don’t expect there to be much impact on price; in energy you simply have to switch to get a good price.
“We will have to wait and see what the impact of this takeover is on the rest of the Big Six – with a new number 2 and npower still looking to exit the market this could be the start of a much bigger shake up.”
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