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SSE and Npower in energy merger talks

From BBC - November 7, 2017

Energy supplier SSE says it has been in talks with the owner of rival Npower with a view to forming a new UK energy giant.

SSE said had been in discussions with Germany's Innogy about merging their UK gas and electricity supply businesses into an independent company.

Such a merger would bring together two of the UK's "big six" gas and electricity suppliers.

SSE, the UK's second-largest supplier, said the talks were "well-advanced".

SSE, formerly known as Scottish and Southern Energy, supplies energy to 7.77 million households while Npower serves 4.8 million.

Any merger - if allowed - would see the new company nipping at the heels of the market leader British Gas, which currently supplies 27% of the market for electricity and gas supply, according to energy consultancy Cornwall Insight.

A combined SSE-Npower company would have a market share of 22.5%, with Germany's E.On trailing on 12%.

The other members of the "big six" UK suppliers are Scottish Power - which is owned by Spain's Iberdrola - and France's EDF.

Price cap pressure

The merger talks take place against an intensifying debate about how well the big six companies are serving UK customers.

Despite years of competition, many households do not switch supplier freely, leaving a large chunk on the most expensive Standard Variable Tariffs (SVTs).

Competition approval

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