- E.ON and Ovo would together serve around 9.6 million UK customers.
- The deal is reportedly valued at around £442 million ($600 million).
- Ovo has faced growing financial pressure and regulatory scrutiny in recent years.
E.ON has agreed to buy rival supplier Ovo Energy in a deal that could reshape the UK energy market and create the country’s largest household gas and electricity provider by customer numbers.
The value of the takeover has not officially been disclosed, although reports have estimated the deal at around £442 million ($600 million). Together, E.ON and Ovo would supply roughly 9.6 million households across Britain, overtaking Octopus Energy in total customer accounts.
The acquisition comes at a difficult time for the UK energy sector, where rising operating costs, tighter regulation and growing pressure to invest in greener technology are pushing suppliers towards consolidation.
E.ON said existing Ovo and E.ON Next customers would see no immediate changes while the deal goes through regulatory approval, which is expected later this year. Existing tariffs will reportedly remain unchanged during the transition period.
From challenger brand to takeover target
Ovo was founded in 2009 by entrepreneur Stephen Fitzpatrick as a challenger to Britain’s traditional “big six” energy suppliers.
The company expanded rapidly after acquiring SSE’s household energy business in a £500 million deal in 2019, helping it become one of the UK’s largest suppliers. But the business has struggled more recently as energy market volatility, tighter financial rules and higher borrowing costs put pressure on suppliers.
In September, Ovo reportedly warned of “material uncertainty” around its financial position after failing financial stress tests carried out by Ofgem. The company has since cut hundreds of jobs as part of wider cost-saving measures.
Reports also suggested Fitzpatrick failed to secure around £147 million ($200 million) in additional shareholder funding that could have helped him regain greater control of the business.
Alongside the takeover, Ovo has also agreed to sell its home services division — including boiler servicing and insurance operations — to Hometree.
Bigger suppliers tighten grip on the market
Industry analysts say the proposed takeover reflects how dramatically the UK energy market has changed over the past five years.
Tom Goswell from Cornwall Insight reportedly said higher costs and stricter regulation now favour larger suppliers with enough scale to absorb financial shocks and invest in new technology.
The combined business is expected to focus heavily on products linked to the UK’s wider energy transition, including electric vehicles, solar power, home batteries and flexible energy tariffs.
E.ON executives also signalled plans to continue working with Kaluza, Ovo’s technology platform that helps manage energy usage and billing systems.
Marc Spieker, E.ON’s chief operating officer commercial, reportedly described the UK as an important growth market for customer-focused energy services and flexibility technologies.
Meanwhile, Chris Norbury, chief executive of E.ON’s UK business, reportedly said the deal was aimed at giving customers more control over how they use and manage energy.
Even with the merger, Octopus Energy is still expected to remain the UK’s largest supplier by market share, holding around 26 per cent of the market, according to Cornwall Insight data.
Analysts say the bigger question now is whether fewer, larger companies will ultimately help stabilise the sector — or leave customers with less choice in the years ahead.
