Octopus Energy closes in on Shell deal as Big Six dominates the market
Octopus Energy is closing in on a deal to snap up Shell’s household energy business – which could be finalised as soon as this autumn.
The takeover would make the supplier the second largest energy firm with over 6m customers.
It would also confirm the Big Six’s stranglehold on the energy market, taking its share of the country’s customer base to well over 90 per cent.
Octopus emerged as the leading candidate to snap up Shell Energy Retail, nearly three months after the division was put up for sale, according to Sky News.
Any potential acquisition would follow less than a year after it bought Bulb Energy – with its 1.6m customer base – which powered the supplier from fifth to third in the retailer rankings.
Taking on Shell’s 1.5m household customers also edges Octopus closer to Centrica-owned British Gas, the UK’s largest energy firm, which supplies 10m homes and businesses.
Meanwhile, Shell calculates that selling the unit would remove about $300m (£238m) in its annual operating expenses.
Lazard, the US investment bank, is handling the auction on Shell’s behalf.
The news agency understands other parties remain in the mix to buy the business from Shell, and that a superior offer could still emerge, but that Shell expects to sign a sale agreement during the autumn.
Ovo Energy has previously been linked as an interested party, with British Gas reportedly submitting an offer earlier this year.
While Octopus is expected to offload Shell’s 500,000 broadband customers, which are also being sold as part of the arrangement, it is unclear whether the company would retain the 125,000 customers across Shell’s retail businesses in Germany and the Netherlands.
Octopus, Shell, Lazard and Ovo declined to comment when approached by City PM
Centrica did not respond at the time of publication.