Sunday , June 13 2021

SSE and NPower say the merger will be delayed due to the price cap

A planned merger between the retail arm of SSE and Npower was questioned after companies announced in late Thursday that their planned merger would be postponed, accusing the British government's introduction of a new price cut in energy bills.

The possible modifications to the "business terms" of the merger and subsequent cataloging of the new company require new discussions in the coming weeks, so that the terms of the agreement can be reconsidered, said the two companies.

"It is likely that the conclusion of the proposed combination would be delayed beyond the first quarter of 2019, but all the work to achieve the training and listing of the new company will continue," said SSE.

The company accused the potential impact of the fuel ticket price, which was completed this week, on the requirements of the new company to hang up collateral against its credit exposure and its ability to obtain and maintain a proper credit rating.

Alistair Phillips-Davies, chief executive of the SSE, said: "When assessing potential changes in the commercial conditions of the combination of SSE Energy Services / npower proposal, the interests of customers, employees and shareholders will be paramount."

A person acquainted with the agreement said that the forecast of profit margins for the combined operation was being pressed by the introduction of the price limit, so the arrangement needed to be reviewed.

But the issue of the price table was well known in the market and the level that was fixed for customers with a standard variable rate (SVT) was widely expected by the industry.

The fusion obtained the final liquidation of UK competition journalist last month.

By bringing the two energy giants together they will reduce the five "Big Six" power suppliers in the UK and raised concerns that it could undermine competition in an industry where the government and the regulator have been working to loosen operators, especially in relation to SVT .

SSE said it would not give further comment on the agreement before mid-December.

Additional reports by Arash Massoudi and David Sheppard

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