Controversial & Big Six & # 39; energy company merger between Npower and SSE lifted by competition watchdog because it claims that it will not lead to higher invoices
- The CMA said that the merger does not mean higher standard variable rates
- It noted that the two companies did not have "close competitors". are for these customers
- If the deal continues, the so-called & amp; Big Six & # 39; reduced to the & # 39; Big Five & # 39;
Camilla Canocchi for Thisismoney.co.uk
The UK competition watchdog has provisionally signed an agreement to merge energy suppliers Npower and SSE after finding that this will not lead to more expensive deals for customers.
The Competition Markets Authority said the merger between two of the Big Six & # 39; energy companies will not affect how they set their prices for standard variable rates – the most common and expensive rates – because the two companies have no & # 39; close competitors & # 39; are for these customers.
If the deal, which was announced last November, continues, it would mean that the so called "Big Six & # 39; would be reduced to the & # 39; Big Five & # 39 ;. A final decision will be made in October.
Approved: the CMA said the merger does not mean higher prices for people who pay the more expensive standard variable prices
The focus of the CMA investigation was on SVT & # 39; s because it was previously established that people who do not switch are usually at one of the STVs of the large energy supplier and pay higher prices.
Therefore, it was investigated whether the merger between SSE and Npower would change how large energy suppliers set these prices.
But he discovered that if SVT customers switch, they would generally switch to a cheaper fixed rate. And if people switch, it would not tend to be between SSE and Npower, but instead a different provider.
Anne Lambert, chairman of the research group at the CMA, said: "We have carefully examined this deal, particularly how this would affect people paying the more expensive standard variable prices.
Our analysis shows that the merger has no effect on how SSE and Npower have determined their SVT prices because they are not close rivals for these customers. & # 39;
The fears of the regulator were further relaxed by a high level of customer switching – the highest in a decade – while it was also determined that the share had fallen on SVTs.
According to the proposed agreement, the new company will be listed on the London Stock Exchange, with the shareholders of SSE 65.6% and the owner Innogy of Npower 34.4%.
SSE is the second largest energy supplier in Great Britain and the merged group will serve approximately 11.5 million customers.
SSE boss Alistair Phillips-Davies welcomed the preliminary findings of the CMA.
He said: "The size and pace of changes in the UK energy market remain significant and require us to evolve to remain relevant, competitive and sustainable.
& # 39; The planned transaction provides a great opportunity to create a more flexible, innovative and efficient business that really delivers to customers and the energy market as a whole. & # 39;