German energy giant E.ON has agreed to buy Bristol-based Ovo Energy, pending regulatory approval. The deal would create one of the UK's largest household energy suppliers.
E.ON announced on Monday, May 11, that the transaction represents a significant investment in the UK market, aimed at accelerating consumer energy flexibility. Until the approval process completes, expected in the second half of the year, Ovo and E.ON will operate as separate companies.
Chris Norbury, chief executive of E.ON UK, said: "For decades the UK energy system focused too much on those upstream. Now is our opportunity to change that. Solar, batteries, EVs and a retailer built to orchestrate. That is what this deal is about: customers in control and new energy that works for everyone."
During the regulatory review period, customers of E.ON Next and Ovo will see no changes. Existing tariffs will be honored in full, and services will continue unchanged.
Stephen Fitzpatrick, founder of Ovo, said: "Bringing Ovo together with E.ON is the right next step for customers, for colleagues, and for the long-term commitment that decarbonisation requires."
Upon completion, E.ON will continue the existing license agreement with energy intelligence platform Kaluza for Ovo's customer base. The companies will also evaluate adopting Kaluza across the wider E.ON group outside the UK.
Mr. Norbury added: "It is not about scale for its own sake. It is about building a retailer with the capability, the technology and the customer base to make new energy work for everyone. We chose Ovo because it's a modern digitally native business with great people and a shared belief that innovation is what can make energy affordable and sustainable for everyone."
Separately, Ovo has agreed to sell its boiler insurance and servicing arm, Home Services, to Hometree, subject to regulatory approval. Ovo will work closely with E.ON and Hometree through the regulatory process.
Ovo was founded by Stephen Fitzpatrick, also founder of Bristol-based 'flying taxi' company Vertical Aerospace, in 2009 as a disruptor to the legacy 'big six' energy companies. Today, Ovo serves about four million customers. In 2019, it bought SSE's household energy and services business for £500 million to accelerate expansion. However, the gas price crisis in 2022 forced the company to cut nearly a quarter of its workforce.
In December last year, Ovo consulted on another 200 roles as part of proposals to comply with new financial standards set by industry watchdog Ofgem. The company said: "We're making changes that bring us closer to customers and sharpen our focus as an energy retailer. Our actions will help us build a stronger, more resilient business that better serves our customers and meets regulatory requirements."
This news came a month after CEO David Buttress, former boss of Just Eat, stepped down after just 18 months in the role.
