Page 6 - Gi flipbook - October 2018

NEWS | INDUSTRY

SSE and Npower merger gets green

light from competition watchdog

The CMA has given the greenlight to the merger

THE PROPOSED MERGER the inquiry group, said: “It must cap prices on SVTs Analyst at Hargreaves
of SSE’s household energy is vital that householders offered by the UK’s Big Six Lansdown, said: “SSE and
business with Npower has have a range of energy energy firms – which will Npower’s merger is, in many
been provisionally approved suppliers to choose from so become the Big Five if the ways, a response to the
by the competition watchdog. they can find the best deal SSE/Npower merger goes challenges facing the sector.
The firms announced for them. With more than ahead. Pressure is mounting from
plans to merge their UK 70 energy companies out SSE Chief Executive politicians from all major
operations in November there, we have found that Alistair Phillips-Davies said parties, and increases in
last year, with the aim there is plenty of choice he is “confident” that the wholesale energy prices are
of creating the country’s when people shop around. deal will be completed by starting to squeeze margins.
second biggest energy “But many people don’t the end of the financial year. “All the while, the rise of
provider after British Gas. shop around for their energy. “The scale and pace of price comparison websites
The Competition and So we carefully scrutinised change in the British energy mean customers are more
Markets Authority (CMA) this deal, in particular how market continues to be likely to switch suppliers. In
launched an inquiry into how it would impact people who significant and requires an industry where stability
the merger would affect pay the more expensive us to evolve to stay has been a key attraction
UK households, focusing on standard variable prices. relevant, competitive and for investors over the years,
concerns about the potential “Our analysis shows that sustainable,” he said. to say the cat is among the
impact on standard variable the merger will not impact “The planned transaction pigeons is something of an
tariffs (SVTs), reports The how SSE and Npower set presents a great understatement.”
Independent. their SVT prices because opportunity to create a SSE is seeking safety in
Now, the CMA has they are not close rivals for more agile, innovative numbers with this deal, Mr
decided to clear the deal these customers.” and efficient company Salmon said, as the merger
after finding that SSE and Ms Lambert added that that really delivers for will mean cost savings and
Npower do not compete Ofgem’s price cap should customers and the energy will provide a boost in scale
closely on SVT prices. also protect SVT customers. market as a whole.” following years of declining
Anne Lambert, chair of Under new rules, Ofgem George Salmon, Equity customer numbers. ■

6

News.indd 1 20/09/2018 12:14