Swindon workers at troubled Npower caught up in energy market mega-merger

November 8, 2017

Energy group Npower’s 100 retail workers in Swindon could soon be employed by a new firm after it confirmed it is to merge with larger rival SSE.

The two groups are both among the UK’s ‘big six’ energy firms – Npower in fifth place and SSE in second. However, Npower has struggled in recent years in the highly competitive market. In 2015 it lost around 350,000 customers and slumped to a £100m loss. 

The merger, which was confirmed this morning after two days of speculation, has already triggered concerns among politicians and consumer groups over competition in the energy supply sector.

Npower employs around 100 people in retail operations at its office at Windmill Hill Business Park, pictured below. A further 900 staff at the site work in areas of the business operated by former Npower parent company RWE which are not be affected by the merger.  

The firm has had a major presence in Swindon for several decades dating back to its launch as National Power from the privatisation of the UK energy supply market.

Npower is owned by German utility giant Innogy, which also owns Swindon-based green energy firm Innogy Renewables UK. This business will not be included in the merger. 

A merged SSE and Npower would have 11.5m customers. SSE, which is listed on the London Stock Exchange as a FTSE 100 company, would own 65.6% of the new company with Innogy having the remaining 34.4%.

SSE, formerly known as Scottish and Southern Energy, today said the tie-up would create “significant” savings but did not give further details. It expects the deal to be done by the end of next year or early 2019.

Npower, which also has a major office in Solihull employing more than 1,300 people, made around 2,000 redundancies across the group last year after the annual £106m loss.

Two years ago it was fined £26m by energy industry watchdogs for overcharging customers and failing to handle customer complaints properly – the largest-ever fine for a British power utility.

Media reports earlier this week claimed Innogy was looking to offload Npower due to its continued loss of customers. 

Confirmation of the merger comes less than a month after draft legislation was published by the government to lower the cost of energy bills.

However, SSE chief executive Alistair Phillips-Davies denied this was had prompted the move.

He said: “The scale of change in the energy market means we believe a separation of our household energy and services business and the proposed merger with Npower will enable both entities to focus more acutely on pursuing their own dedicated strategies, and will ultimately better serve customers, employees and other stakeholders.”

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