The Competition and Markets Authority (CMA) has cleared E.On's takeover of rival Ovo, paving the way for the deal to create the UK's largest electricity supplier.
The watchdog said it would not refer the acquisition of Ovo by Germany's E.On for an in-depth investigation. It had been examining the tie-up to assess whether it would reduce competition in the energy market.
Deal Details and Customer Base
E.On agreed to buy Ovo in May for an undisclosed sum, though reports indicated 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.
Ovo was founded by Stephen Fitzpatrick in 2009 and has since grown into one of the country's largest household suppliers, while also developing technology to enable greener energy usage. Mayfair Equity Partners invested in the company in 2015.
Industry Pressures and Strategic Review
The provider has faced pressure in recent years, with the firm 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.
This came after company accounts warned about a “material uncertainty” over its future following its failure to meet targets.
Union Response and Worker Concerns
Unite national officer for energy, Simon Coop, said the union would hold discussions with Ovo and E.On to ensure workers are treated fairly. He said: “This takeover cannot result in any reduction in pay, terms or conditions to our members in Ovo or E.On and Unite are committed to consultation and negotiations as the takeover proceeds.”
Coop claimed Ovo workers had been “let down” after its purchase of SSE's energy supply arm in 2020, which was followed by thousands of job cuts and office closures. “This is now a new chapter for Ovo workers and one which must be more positive,” he said.
