SSE calls off merger with Npower

A planned merger between Perth-based power supplier SSE and rival Npower that would have reduced Britain's 'Big Six' energy companies to just five has been scrapped.

SSE chief executive Alistair Phillips-Davies: 'not an easy decision to make'. Picture: Contributed

The utility giants said the plans had been impacted by a number of factors, including the performance of their businesses, clarity on the final level of the UK government’s default tariff cap and changing energy market conditions.

The two companies had been hoping to seal the merger of their retail operations in the first quarter of 2019 after the tie-up was recently given the green light by the competition watchdog.

But only last month, SSE admitted there was “some uncertainty” over whether the merger would go ahead after the pair delayed the tie-up due to the incoming cap on default tariff prices.

SSE said it would now consider a standalone demerger and listing, a sale or an alternative transaction for its household energy business.

Chief executive Alistair Phillips-Davies told investors: “This was a complex transaction with many moving parts. We closely monitored the impact of all developments and continually reviewed whether this remained the right deal to do for our customers, our employees and our shareholders. Ultimately, we have now concluded that it is not. This was not an easy decision to make, but we believe it is the right one.”

“We are now exploring all the available options with a view to delivering this future in the best possible way. In this, the interests of our customers, employees and shareholders remain paramount.

“In the meantime, we remain strongly committed to high standards of service for customers and delivery of our five-year dividend plan for shareholders.”