SSE Sse Plc

   By Oliver Griffin 
 

SSE PLC (SSE.LN) said Monday that it has terminated plans to merge its household and energy services business with Innogy SE's (IGY.XE) U.K. retail division, Npower, as terms for a revised deal couldn't be reached.

The energy company first proposed merging its SSE Energy Services business with Npower at its interim results in fiscal 2018. However, the transaction was delayed after SSE said it would assess the commercial terms of the deal, citing market developments.

The deal was derailed by multiple factors including the performance of the respective businesses, clarity on the final level of the default tariff cap and changing energy-market conditions, the company said.

SSE said the new company would have faced very challenging market conditions, particularly during the period when it would have been burdened with the bulk of the deal's integration costs.

SSE Chief Executive Alistair Phillips-Davies said the company continually reviewed whether the deal was right for SSE's customers, employees and shareholders, and ultimately concluded it wasn't. "This was not an easy decision to make, but we believe it is the right one," Mr. Phillips-Davies said.

SSE said work to separate SSE Energy Services will continue and other options are being considered. These options include a standalone demerger and listing, a sale or an alternative transaction.

The company said its energy-services business is expected to be profitable and cash-flow-positive in fiscal years 2019 and 2020.

Write to Oliver Griffin at oliver.griffin@dowjones.com; @OliGGriffin

(END) Dow Jones Newswires

December 17, 2018 02:37 ET (07:37 GMT)

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