Watchdog promises Npower and SSE tie won’t lead to higher bills

Fears that a merger of energy giants Npower and SSE would lead to higher bills were waved away on Thursday by competition watchdogs.

The Competition and Markets Authority ruled that, since the two players don’t compete on standard variable tariffs, the most common deals, in the first place, bills shouldn’t rise.

The merger of Npower and SSE’s retail arm is still likely to attract close scrutiny from consumer groups concerned that the Big Six energy companies already had a stranglehold on the market and that the move to a Big Five can hardly improve matters.

The new, as yet unnamed, company will be second only to British Gas in the UK with 13 million accounts.

Anne Lambert at the CMA said: “With more than 70 energy companies out there, we have found that there is plenty of choice when people shop around. But many people don’t shop around for their energy. So, we carefully scrutinised this deal, in particular how it would impact people who pay the more expensive standard variable prices.

“Our analysis shows that the merger will not impact how SSE and Npower set their SVT prices because they are not close rivals for these customers.”

The new company will be owned 65% by SSE shareholders with the rest held by Npower parent Innogy. It hopes to join the stock market next year.

Alistair Phillips-Davies, chief executive of SSE, said: “The scale and pace of change in the GB energy market continues to be significant and requires us to evolve to stay relevant, competitive and sustainable.

“The planned transaction presents a great opportunity to create a more agile, innovative and efficient company.”

Phillips-Davies is staying with the old SSE. The new arm will be led by Katie Bickerstaffe, formerly of Dixons. In that role, she helped oversee the merger of Dixons with Carphone Warehouse, a deal that has lately floundered.

She has said she wants the new company, dubbed SenPower, to have a “more digital” more “customer-friendly” approach.