The next step on our journey to create a new, independent supplier

Today marks the first regulatory milestone in our bid to create a new, independent supplier as we submitted our complete merger notice to the Competition and Markets Authority (CMA) (the UK’s merger control authority). This submission kick-starts the CMA’s review of the proposed merger between SSE Retail and npower.  The CMA has an initial statutory timeline of up to 40 working days to investigate the merger’s potential impact on competition in the GB energy supply market. 

There is likely to be interest in the commencement of this investigation; however, it is worth noting it is standard for transactions of this size to be reviewed by the CMA. When the proposed merger was first announced on 8 November, we confirmed it would be subject to approval by the relevant regulatory bodies and over the last few months SSE and npower have been in discussions with the CMA.  

Since 8 November, I’ve discussed the many opportunities the proposed merger presents with a wide range of individuals, including customers, external stakeholders and employees. Based on these discussions, I am more convinced than ever it has strong strategic logic and will drive significant benefits for customers for three main reasons. 

Firstly, the proposed merger will further improve competition by offering customers a completely new model, combining the resources and experience of larger players with the agility and innovation of an independent supplier. The GB energy supply market is undergoing a radical transformation. Low barriers to entry and expansion for new-entrants mean there are now over 60 suppliers actively competing for customers, switching rates are at record levels, and smaller suppliers are continuing to grow their market share. Alongside these changes, a number of experienced new-entrants from overseas markets have moved into the GB energy supply market, such as ENGIE and Vattenfall. Separately, Shell announced it had signed an agreement to acquire the largest mid-tier supplier, First Utility. Taken together, these changes have enhanced competition in the domestic energy supply market and will continue to do so. 

Secondly, the newly established supplier is expected to be able to compete more efficiently and effectively as the proposed merger should deliver significant synergies, largely derived from operational cost efficiencies and capital expenditure savings from a combined IT platform. These savings should enable the company to be one of the most efficient competitors in the GB energy market, ultimately resulting in savings for customers. 

Thirdly, the new business will be better able to respond to customer expectations on tariff innovation and technological development. Smart meters, connected homes, domestic household batteries and blockchain will all disrupt traditional business models in the GB energy supply market. As a standalone retail business, benefiting from its own dedicated board of directors and specialist management team, the proposed new supplier will be better positioned to focus on the future, with the capital to invest in innovation to more effectively respond to changing consumer demands.

SSE has a proud record of delivering for customers and to ensure we continue to prioritise their needs, today I’m pleased to announce that SSE will be establishing a Merger Customer Service Advisory Forum. This will have an independent Chair, meet quarterly, and be tasked with ensuring that the needs of customers remain at the forefront of our thinking as we plan the potential integration of two energy supply businesses. 

Given the process of separating Retail from the rest of SSE and preparing for listing will take some time, our priority for now remains continuing to deliver for our customers. Today, however, marks the first significant regulatory step in our quest to create an exciting, new, standalone energy supplier.

About the author

Tony Keeling Director of Customer Service

Tony Keeling is Director of Customer Service at SSE and has been with the company since 2000. He is responsible for all aspects of the customer service experience, including setting the customer service vision and strategy.

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