SSE has sold its energy services business to Ovo Energy in a deal worth £500m, creating one of the UK’s largest power suppliers and a new rival to British Gas.
The Big Six energy supplier today said it had agreed to offload its consumer business for £400m in cash and £100m in loan notes.
The deal marks a huge expansion for challenger firm Ovo, which is the UK’s largest independent supplier. Ovo will take over SSE’s 3.5m customers, in addition to roughly 8,000 employees.
“This transaction marks a significant moment for the energy industry,” said Stephen Fitzpatrick, Ovo founder and chief executive.
“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 said the proceeds of the takeover, which is expected to complete last this year or early next year, will be used to pay down the company’s debt.
Alistair Phillips-Davies, SSE chief executive, 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.”
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