German energy group E.ON has agreed to acquire struggling UK rival Ovo, a deal that would create Britain's largest gas and electricity supplier by number of households served. The combined company would supply approximately 9.6 million customers, surpassing current market leader Octopus, which serves nearly 8 million homes.
The value of the transaction has not been disclosed, but reports estimate it at £600 million. E.ON stated that the takeover represents a significant investment in the UK market and is expected to lower bills for customers. The company confirmed that existing tariffs will be honoured in full and service will continue unchanged while awaiting regulatory approval, anticipated in the second half of the year.
E.ON has around 5.6 million UK customers, and Ovo has 4 million. Ovo was founded in 2009 by green energy entrepreneur Stephen Fitzpatrick as a challenger to the big six suppliers. It became the UK's second-largest supplier in 2019 after buying SSE's home energy business for £500 million. However, Ovo has recently struggled financially, barely turning a profit, and earlier this year cast doubt on its future after failing Ofgem's financial stress tests. It has since cut hundreds of jobs.
Under the deal, Ovo will also sell its home services business, which provides boiler insurance and servicing, to Hometree. E.ON plans to continue Ovo's energy intelligence platform licence agreement with software company Kaluza and may use it across the wider E.ON group outside the UK. The acquisition is expected to enable faster investment in technology and services to support the energy transition.
Marc Spieker, chief operating officer at E.ON, said the UK is an important growth market, particularly for customer-focused energy solutions. Chris Norbury, CEO of E.ON's UK business, added that the deal is about putting customers in control and making new energy work for everyone. Energy analyst Tom Goswell of Cornwall Insight noted that the deal reflects a market favouring larger suppliers with scale to absorb higher costs and tighter regulation, but raised concerns about reduced consumer choice.
