Energy supplier SSE Plc. admitted that it was in talks with its rival, Npower Limited to form a new energy company in the UK.
SSE, earlier known as Scottish and Southern Energy, caters to the energy needs of nearly 7.77 million households. This is a substantial increase over its competitors’ demands. SSE’s closest rival, Npower supplies energy to approximately 4.8 million households.
However, the company has now moved to merge with Npower in the hopes to create a brand new energy supplier.
SSE has also been in discussions with Innogy, an energy supplier based out of Germany. The company is hoping to merge Innogy’s UK-based gas and electric supply businesses into an independent company.
These mergers, if successful, would result in the unification of two of the UK’s “big six” gas and electricity supplies. Commenting on the proceedings, SSE stated that the talks were “well-advanced”.
SSE’s main objective in merging with Npower is to butt heads with Britain’s top energy supplier—British Gas. Reports state that British Gas currently holds mastery over nearly 27% of the gas and electricity supply market.
The move may come as a welcome respite to Npower, which has struggled with turning profits in recent times. Additionally, SSE’s second proposal, to Innogy could come to fruit since the German company is seeking an outlet for its surplus business.
All the companies in question have locked horns to maintain their position in the market. New energy companies are forever cropping up, attempting to dethrone the current market powers.
Energy companies are also facing heat from the British government, which has moved to cap their most valuable prices—the standard variable tariffs.
Combining the two companies would automatically result in a bigger company, which could fight against the constantly rising odds.