UK energy giant SSE has confirmed it will complete the £500 million sale of its energy services arm to Ovo Energy today, clearing the way for the firm to focus on its renewable energy portfolio.
The agreement, which will see Ovo Energy take control of SSE’s household energy and services business, will allow SSE to use the net proceeds of the deal to reduce its net debt.
The deal will see Ovo Group, a subsidiary of Ovo Energy, pay the sum through £400m in cash and £100m in loan notes.
SSE is the third largest supplier in the UK energy market, with around 3.5 million household customers and 8,000 staff.
It is understood all 8,000 staff will transfer over from SSE to Ovo.
Ovo is currently the UK’s largest independent energy supplier, with 1.5 million customers and about 2,000 employees.
Alistair Phillips-Davies, Chief Executive of SSE plc, said: “We are very pleased to be completing this transaction, which we firmly believe is the best outcome for the business, its customers and its employees.
“The sale is in line with our clear strategy, centred on developing, operating and owning renewable energy and electricity network assets, along with growing businesses complementary to this core.
Mr Phillips-Davies said the deal allowed SSE to be “a more focused group”.
He added that the firm was now “better positioned to lead the low carbon transformation required to achieve the UK’s vital net zero commitment in the years to come”.
SSE currently has the largest offshore wind portfolio in the world, thanks to the recent construction of the 84-turbine Beatrice Offshore Wind Farm in the Outer Moray Firth and the proposed Seagreen project, a series of seven giant wind developments off Scotland’s east coast.
The firm, through its clean energy subsidiary SSE Renewables, also operates a number of onshore wind developments such as Stronelairg, a 66 turbine wind farm near Fort Augustus, and the Bhlaraidh wind farm north-west of Invermoriston.
It also has a number of hydro schemes across Scotland.
Stephen Fitzpatrick, CEO and Founder of OVO, said: “Today is an exciting day. It marks the end of one chapter for OVO but, more importantly, the beginning of the next one together with the SSE Energy Services business.
“We started OVO with a bold ambition to do better for customers and have stayed true to that vision ever since.
“SE’s history of excellence at scale combined with OVO’s innovative technology and our Plan Zero commitments mean that together, as one team, we can bring millions more people with us on our journey towards zero carbon living.”
