E.On’s takeover of rival Ovo has been given the green light by Britain’s competition watchdog in a move paving the way for the deal to create the UK’s largest electricity supplier.
The Competition and Markets Authority (CMA) said it would not refer the takeover of Ovo by Germany’s E.On for an in-depth investigation.
It had been probing the tie-up to look at whether it would lessen competition in the energy market.
E.On agreed to buy Ovo in May for an undisclosed sum, though reports indicated that it could be as much as £600 million.
The deal will see E.On add Ovo’s four million customers to its existing 5.6 million customers and it expected to complete before the end of the year.
Ovo was founded by Stephen Fitzpatrick in 2009 and has since expanded to become one of the country’s largest household suppliers, while also developing technology to allow for greener energy usage.
Mayfair Equity Partners invested in the company in 2015.
But the provider has come under pressure in recent years, with the firm previously saying that changes to expectations regarding financial resilience and increased regulation had “altered the economics of the sector”.
The group launched a review into its strategic options, ultimately deciding to move forward with a sale process.
It came after company accounts warned about a “material uncertainty” over its future following its failure to meet the targets.
Unite national officer for energy, Simon Coop, said the union would hold discussions with Ovo and E.On to ensure workers are treated fairly.
He said: “This takeover cannot result in any reduction in pay, terms or conditions to our members in Ovo or E.On and Unite are committed to consultation and negotiations as the takeover proceeds.”
He claimed Ovo workers had been “let down” after its purchase of SSE’s energy supply arm in 2020, which was followed by thousands of job cuts and office closures.
“This is now a new chapter for Ovo workers and one which must be more positive,” he said.
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