United Kingdom competition watchdog provisionally clears SSE-npower merger

SSE and NPower

SSE and NPower

Households on those tariffs would also soon be protected by the government's price cap, the authority said in a provisional finding.

However, the CMA has decided that the issues in question did not pose a risk: standard variable tariff prices were found not liable to increase as a result of a merger, and United Kingdom customers were found to have plenty of options for switching suppliers among the more than 70 companies available.

But Ms Lambert cautions: "Many people don't shop around for their energy, so we carefully scrutinised this deal".

The competition watchdog has provisionally cleared the proposed merger of British energy providers SSE and Innogy's Npower for their retail units. "The planned transaction presents a great opportunity to create a more agile, innovative and efficient company that really delivers for customers and the energy market as a whole", said Alistair Phillips-Davies, the firm's chief executive.

The CMA found that the number of people switching energy provider is the highest in a decade and the proportion on SVTs has fallen.

However, the investigation found that neither firms represented price leaders, nor were they considered such by competitors, and that the merger would prove to be of little importance in how prices are set by larger suppliers.

Despite concerns that the merger will narrow choice for consumers, the CMA points out that there are now over 70 providers in the United Kingdom energy market, with levels of switching at their highest in a decade.

If SVT customers switch, they usually change to a cheaper, non-SVT, tariff.

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The risk of losing customers as a result of an SVT price rise will not change with the merger.

SSE is Britain's second biggest energy supplier and the merged group will serve some 11.5 million customers.

SSE and Npower do not compete closely on SVT prices.

All of Britain's top energy suppliers have announced price increases this year, blaming rising wholesale costs.

However, the CMA's inquiry group found the pair "do not compete closely on SVT prices".

Stephen Murray, energy expert at MoneySuperMarket, says it doesn't come as a huge surprise that the CMA review has given provisional clearance to the SSE/Npower merger. This included hearings with consumer groups and suppliers in Scotland where SSE has a large share of consumers. None of these raised substantive concerns about the effects of the merger on householders.

The CMA is due to publish its final report on the merger in October.

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