German energy provider E.On has been given the green light by Britain's competition watchdog to acquire OVO Energy, a move that will create the UK's largest electricity supplier. The Competition and Markets Authority (CMA) has said it will not refer the takeover to an in-depth investigation, having probed the tie-up to assess whether it would lessen competition in the energy market.
Deal details and customer numbers
E.On agreed to buy rival firm OVO in May for an undisclosed sum, though reports indicated that it could be as much as £600 million. The deal will see E.On add OVO's four million customers to its existing 5.6 million customers, and it is expected to complete before the end of the year.
Background on OVO
OVO was founded by Stephen Fitzpatrick in 2009 and has since expanded to become one of the UK's largest household energy suppliers, while also developing technology to enable greener energy use. Mayfair Equity Partners invested in the company in 2015.
The provider has come under pressure in recent years, with the company previously saying that changes to expectations regarding financial resilience and increased regulation had "altered the economics of the sector". The group launched a review into its strategic options, ultimately deciding to move forward with a sale process. It came after the company's accounts warned of a "material uncertainty" over its future following its failure to meet the targets.
What it means for OVO customers
Citizens Advice explains that when an energy supplier is being sold or changing its name, they will contact customers informing them of the name of their new supplier and when their account will be moved to the new supplier. In most cases, gas and electricity supply will not be interrupted as distribution is handled by regional operators rather than the company itself. The providers handle the switchover, and the contract should be moved over to the new owners. Customers should contact OVO Energy for any queries about their contract.
