Energy giant E.on is planning to acquire its rival Ovo, aiming to form the largest energy supplier in the UK with almost 10 million customers. German-owned E.on Next believes this strategic move will enhance its ability to provide value to customers and expand its core retail operations. Speculation had been growing that Ovo, facing financial challenges, was a target for acquisition.
This acquisition would propel the combined entity ahead of Octopus Energy, which recently surpassed British Gas to become the leading domestic energy provider in the UK. Currently holding a 16% market share, E.on, and Ovo, with a 12% share, together would command a 28% share of the market, serving 9.7 million customers compared to Octopus Energy’s 25%.
Although the financial details of the deal have not been disclosed, estimates suggest Ovo’s value could be around £400 million, though some sources believe it may be lower. The completion of the deal is subject to regulatory approval, with E.on expecting clearance in the latter half of this year.
During the regulatory review period, there will be no immediate changes for customers of E.on Next or Ovo. Existing tariffs will remain valid, and services will continue without disruption as the two companies operate independently for the time being. However, post-takeover approval, the future course of action has not been confirmed by the companies.
Ovo reassured its customers that their energy supply, tariffs, and customer interactions will remain unaffected by the acquisition. The brand will persist during the regulatory review process, but there is speculation that the Ovo name might be rebranded post-approval.
Established by entrepreneur Stephen Fitzpatrick in 2009 to challenge the energy market, Ovo acquired SSE in 2019. Facing financial pressures due to regulatory changes, Ovo concluded that a sale to E.on would provide a more stable platform for its business and customers.
Emphasizing the benefits for customers, E.on highlighted its plans to offer a wider range of products such as solar panels, energy storage batteries, and electric vehicle charging. The merger aims to accelerate the transition to a customer-focused energy system, benefitting a broader spectrum of consumers.
Chris Norbury, E.on UK’s chief executive, emphasized that the merger is aimed at building a retailer equipped with the technology and customer base to make sustainable energy accessible to all. The decision to choose Ovo was driven by its modern digital approach and shared commitment to innovation in making energy affordable and eco-friendly for everyone.