SSE, the Perth-based utility giant formerly known as Scottish & Southern Energy, has been given a thumbs up for controversial plans to merge its retail operations with those of rival Npower.
Britain’s competition watchdog has provisionally cleared the deal which would reduce the Big Six energy suppliers to just five.
The Competition and Markets Authority (CMA) dismissed fears that the tie-up would have an impact on the most expensive deals as its inquiry found the providers do not compete closely on standard variable tariffs (SVTs).
There had been initial concerns that the proposed merger would affect these tariffs – the most common and expensive energy deals.
Anne Lambert, chairwoman of the inquiry group at the CMA, said: “With more than 70 energy companies out there, we have found that there is plenty of choice when people shop around.
“But many people don’t shop around for their energy. So, we carefully scrutinised this deal, in particular how it would impact people who pay the more expensive standard variable prices.
“Our analysis shows that the merger will not impact how SSE and Npower set their SVT prices because they are not close rivals for these customers.”
SSE chief executive Alistair Phillips-Davies said: “Following a thorough and in-depth investigation, we are pleased the CMA has provisionally concluded that the proposed merger of SSE Energy Services and Npower does not raise competition concerns.
“The scale and pace of change in the GB energy market continues to be significant and requires us to evolve to stay relevant, competitive and sustainable.
“We look forward to continuing to engage with the CMA as it prepares its final report ahead of the statutory deadline in October.”
SSE and Npower announced in November that their UK household energy supply and services businesses would join forces.
Under the deal, the new company would be listed on the London Stock Exchange with SSE shareholders holding 65.6 per cent and Npower owner Innogy holding 34.4 per cent.
SSE is Britain’s second biggest energy supplier and the merged group will serve some 11.5 million customers. Scottish Gas-owner Centrica, Iberdrola (which owns ScottishPower), E.ON and EDF make up the remainder of the Big Six.