Scottish Power, the supplier of energy belonging to the Spanish and the largest rival Ovo Energy began to hold exploratory talks of a merger that would create a company serving more than six million British households.
Sky News has learned that the leaders of Iberdrola, who owns the Scottish power, and Ovo have embarked on preliminary discussions in recent weeks on the possibility of an agreement.
The talks are at an early stage and any official transaction would be in months, if it has materialized.
If the two companies are suitable for a merger of their residential gas and electricity operations, it would create the third supplier behind British gas and the energy of the octopus.
As a large company, with 4 million customers, OVO would probably be the buying entity, but with Iberdrola would potentially contribute in cash and remaining as an actionary in the enlarged group, according to a banking source.
Scottish Power serves approximately 2.4 million households.
The discussions between the two companies take place in parallel with a separate process by which Ovo explores the potential to lift around 300 million pounds sterling in the sale of new actions of the company, according to industry sources.
In recent weeks, a number of financial investors have been contacted by Rothschild, the investment bank advising Ovo, on the opportunity.
Exactly a year ago, Sky News revealed that Ovo had hired Rothschild To explore the options, in particular by providing a new investor or a sale, 15 years after its launch in order to challenge industry oligopoly.
Founded by Stephen Fitzpatrick, the entrepreneur who now owns Kensington Roof Gardens, OVO shareholders include the investment company Mayfair Equity Partners, Morgan Stanley Investment Management and Mitsubishi Corporation, the Japanese conglomerate.
Under Mr. Fitzpatrick, who launched Ovo in 2009, the company positioned itself as a Challenger brand offering a service superior to the players established in industry.
Ovo’s transformation moment came in 2020, when he Bought the retail supply arm of SSEThe transforming overnight in one of the main British energy companies.
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However, its growth has not been without difficulty, in particular with regard to its disputed relationship with OFGEM and a torrent of customer complaints concerning overload.
Justin King, the first J SANSBURY The chief who now chairs Ovo, has repaired his regulatory relations a priority for the company.
He also supervised the recruitment of David Bustress, who was briefly Boris Johnson Tsar of the cost of living after leaving the first job to eat, as managing director.
The key to the longer-term evaluation of OVO will be the performance of its technological platform, Kaluza, which has been set up to dismiss software to other energy suppliers and provides customers with an intelligent electric vehicle load and heat pumps.
OVO announced last year that Agl Energy, one of the largest energy suppliers in Australia, bought a 20% stake in Kaluza in an evaluation of $ 500 million (395 million pounds sterling).
The British Energy Company has also entered the loading sector of electric vehicle cars under the brand load anywhere, adding tens of thousands of public charging points across the United Kingdom.
IBERDROLA bought Scottish Power in 2007 in an agreement promoting the company to more than 11 billion pounds sterling.
Next week, the United Kingdom The energy price ceiling will fall From 7% to £ 1,720 per year, following an announcement by OFGEM, the industry regulator.
Ovo and Scottish Power both refused to comment.