SSE has announced it has agreed to sell its energy services business to OVO Energy in a deal worth £500 million.
The deal will make OVO Energy one of the biggest suppliers in Britain, second only to British Gas in size, as SSE’s 5.7 million household customer accounts will move to OVO Energy, which already has around 1.5 million customers.
All of SSE Energy Services’ 8,000 employees will also transfer to OVO.
The move comes as the supplier wants to concentrate on its renewable energy and regulated electricity networks.
SSE will continue to provide certain services to OVO under a Transitional Services Agreement to ensure a smooth transition for a period post-completion.
It added there will be no immediate impact on customers after completion and the SSE brand will be operated by OVO under licence for a period, “allowing time for a phased and carefully managed migration and continued high standards of service”.
Alistair Phillips-Davies, Chief Executive of SSE, said: “Following the transaction, SSE will be able to give an even greater 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.
“With a large and growing renewable energy pipeline and a leading position in the electricity networks needed to deliver low carbon energy reliably to homes and businesses in an increasingly electrified economy, we are well placed to create value from the low carbon transition.”
The deal is expected to be completed later this year or early 2020 following the necessary regulatory approvals.
Stephen Fitzpatrick, CEO and Founder of OVO Energy said the deal marks a “significant moment” for the energy industry.
He added: “Advances in technology, the falling cost of renewable energy and battery storage, the explosion of data and the urgent need to decarbonise are completely transforming the global energy system.
“For the past three years, OVO has been investing heavily in scalable operating platforms, smart data capabilities and connected home services, ensuring we’re well positioned to grow and take advantage of new opportunities in a changing market.”