The UK’s Competition and Markets Authority (CMA) is exploring the impact of a major asset swap in Germany on the proposed merger of two of the UK’s biggest energy suppliers, npower and SSE.
In a deal announced on Saturday, March 10, the German utility E.ON agreed to acquire rival RWE’s subsidiary Innogy SE, growing E.ON’s energy network and retail businesses.
The shakeup of the German energy sector, the deal has big potential consequences for the UK. Npower is owned by Innogy SE, but under the asset and shares exchange the business will transfer to E.ON, one of the UK’s ‘big six’ energy firms.
The CMA was already investigating the merger of npower and UK-listed SSE, but on Monday said it would now also examine the ramifications of the E.ON-RWE deal. The CMA is understood to be in conversations with E.ON.
“The fate of the UK customer businesses is in question,” said Meredith Annex, analyst at Bloomberg New Energy Finance. “Having a few larger players with more power creates political concerns in an already sensitive market.”
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