Independent energy supplier OVO Energy has received approval from the UK’s Competition and Markets Authority (CMA) for its proposal to acquire SSE Energy Services.
The competition authority has given its approval for the transaction after confirming the deal would not reduce the competition.
SSE Energy Services supplies electricity and gas to nearly six million households and businesses in Great Britain under various brands including SSE, SSE Scottish Hydro, SSE Southern Electric and SSE SWALEC.
OVO Energy founder and CEO Stephen Fitzpatrick said: “We’re delighted with the CMA’s decision and look forward to bringing SSE into the OVO family.
“There is a lot of work to be done, but we’re excited about the challenge ahead and the opportunity to help even more customers on the journey to zero carbon.”
OVO Energy agreed to acquire SSE Energy Services for a fee of £500m in September 2019, which included £400m in cash and £100m in loan notes.
With this divestiture, SSE intends to reduce its certain net debt, which is reported to be around £9.4bn.
SSE chief executive Alistair Phillips-Davies said: “We are very pleased that the CMA has cleared the proposed sale of SSE Energy Services to OVO Group.”
“This underlines our long-held belief that a dedicated, focused and independent retailer will ultimately best serve customers, employees and other stakeholders. With the required regulatory approvals now in place, we can make the final preparations for completion, expected around mid-January 2020.
“Completion of the transaction will give SSE plc even sharper focus to delivering the low carbon infrastructure needed to help the UK reach net-zero emissions. We have a clear strategy around developing, operating and owning renewable energy and electricity network assets, along with growing businesses complementary to this core.”
The deal is expected to close in January 2020.
Upon completion of the deal, SSE intends to continue its energy supply business to customers in Great Britain, which include businesses and household customers in Northern Ireland and Ireland.