The proposed merger of SSE and Npower faces an in-depth competition inquiry after the energy giants failed to address concerns their combination would result in higher household bills. The Competition and Markets Authority said it had referred the merger for a Phase 2 inquiry which would take until October 22. The watchdog had given the companies until late last week to offer “undertakings” to address its competition concerns but said they had not done so. The transaction could be complicated by the fact that Innogy, which is controlled by Germany’s RWE, is due to be sold to Eon, a rival German supplier that already has a UK supply business. This raises the possibility that Eon could end up owning or having indirect stakes in three of the Big Six suppliers. Industry sources expect Innogy could therefore be required to sell its holding in the merged SSE-Npower company before the Eon deal goes through.
Times 9th May 2018 read more »
The energy giants behind one of the sector’s biggest mergers are poised to offer the UK’s competition watchdog a full defence of its £3bn plan to cut the Big Six suppliers down to five. SSE and Npower have opted for a full Competition and Markets Authority investigation of its scheme to create a new energy supply giant, rather than offering measures to assuage the authority’s concerns that a merger might lead to higher bills. The CMA’s initial review of the deal, which would create a supplier with a combined 11.5m customers in the UK, raised fears that the merger would reduce competition in a market already plagued by concerns over unfair bills.
Telegraph 8th May 2018 read more »
Centrica, the owner of British Gas, has started the hunt for a new chairman at an uncertain time for the UK’s largest household energy supplier. Rick Haythornthwaite, who was appointed in January 2014, announced on Tuesday that he would step down within 12 months, at a time when British Gas and the other “big six” suppliers contend with intense political pressure over “rip-off” energy bills. Centrica investors, meanwhile, have seen the value of shares drop by more than half over the past four years, from 344.9p at the start of 2014 to 153.65p and are worried about the company’s growth and ability to maintain its dividend. News of Mr Haythornthwaite’s departure also turns the spotlight on to Iain Conn, a former BP veteran who arrived as chief e xecutive in January 2015. He will need to be at his most persuasive when he faces shareholders at Centrica’s annual meeting in London next Monday that the company is on the right path under the strategy he put in place three years ago. When Mr Conn took the helm he inherited a company which, under his predecessor Sam Laidlaw, had ploughed money into buying oil and gas assets. But with the oil price collapsing, Mr Conn changed tack. Weeks into his tenure he cut the dividend by 30 per cent and tore up the strategy. The former oil man said Centrica would move away from capital-intensive generating assets. Gas power plants were sold. Last year, Centrica merged its European oil and gas business into a joint venture. Future growth, said Mr Conn in July 2015, would come from energy supply and services, energy markets and trading and “the connected home” – the installation of devices such as Centrica’s smart Hive thermostat that allows customers to control their heati ng and lighting remotely.
FT 8th May 2018 read more »