SSE shareholders back retail merger with Npower

Shareholders have voted in favour to merge SSE’s retail arm with Npower following a general meeting held today (19 July).

The new company will be an independent energy supply and services business that will “create a new market model”.

Subject to approval by the Competition and Markets Authority (CMA), the move will see a combination of the “resources and experience of two established players with the focus and agility of an independent supplier” – according to a circular published last month.

Following the vote SSE’s chairman, Richard Gillingwater, said: “I am very pleased that SSE’s shareholders have passed the two resolutions relating to the planned SSE Energy Services transaction, and by such an overwhelming margin.”

The news was also welcomed by the parent company of Npower, Innogy.

A spokesperson said: “The SSE shareholder vote in favour of the proposed merger is a crucial step on the journey to create a new British company that will better serve customer needs in the rapidly changing energy market.

“With the successful outcome of this vote, we continue to progress on schedule and in line with completion and listing of the new company in Q4 2018 – Q1 2019.”

Katie Bickerstaffe, chief executive designate of the new company, is expected to take up her appointment on 24 September.

The announcement comes after the company’s Q1 trading update, published earlier today, revealed warm weather “negatively impacted” SSE’s operating profits by around £80 million.

During today’s meeting, held in Perth, shareholders were asked to approve two resolutions, these were:

• the declaration of a special dividend (in kind in the form of shares in the new company) to give effect to the demerger; and
• the waiver of the obligation on Innogy, which owns Npower Group Limited, to make a general offer for all of the issued shares in the new company on completion (under Rule 9.1 of the City Code on Takeovers and Mergers).

As well as their existing SSE shares, shareholders will also hold one share in the new company for every existing SSE plc share they hold at the demerger record time.

The move is subject to approval by the CMA which is expected to announce its provisional findings in August, with the full decision expected in October.

Completion of the transaction and the listing of the new retail energy company are expected to occur in the last quarter of 2018 or the first quarter of 2019.