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Controversial SSE/Npower merger on way to being approved

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Written by: Paloma Kubiak
30/08/2018
The proposed merger between energy giants SSE and Npower has been provisionally cleared to go ahead after an inquiry found customers wouldn’t face higher prices.

Provisional findings by the Competition and Markets Authority (CMA) suggest the merger “does not raise competition concerns”.

Initially, the move was met by concerns that customers on expensive standard variable tariffs (SVTs) could face paying a higher price for their energy and in April this year, the CMA launched an initial investigation.

At the time, it said that the rivalry between the large energy companies, including Npower and SSE was an important factor in how they set tariffs, adding that “the removal of such competition could therefore lead to higher prices for some customers”.

But an independent panel has provisionally decided to clear the deal, stating that SSE and Npower don’t compete closely on SVT prices.

Anne Lambert, chair of the inquiry group, said: “It’s vital householders have a range of energy suppliers to choose from so they can find the best deal for them. With more than 70 energy companies out there, we have found 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 CMA added that the number of people switching energy provider is at its highest level in a decade and the proportion of customers on SVTs has fallen. Further, few customers switch between SSE and Npower, instead moving to another supplier.

It’s accepting views on this provisional decision until 20 September before it comes to a final decision.

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