Merger of Npower and SSE's Retail Division Could Cause Issues -UK Competition Authority

   By Carlo Martuscelli

The U.K.'s Competition and Markets Authority said Thursday that the proposed merger between SSE PLC's (SSEZY) retail division and Npower could lead to higher bills for customers.

The two companies have until May 3 to respond to the CMA's statement. If they do not, the CMA will refer the merger for a phase 2 investigation, it said.

Rivalry between large energy companies--including SSE and Npower, which is owned by Innogy SE (IGY.XE)--affects how tariffs are determined, and a lessening of this competition could lead to higher prices for customers, the CMA said.

"We know that competition in the energy market does not work as well as it might. However, competition between energy companies gives them a reason to keep prices down," Rachel Merelie, senior director at the CMA, said.

Alistair Phillips-Davies, chief executive of SSE, said he was confident that the proposed merger would benefit both customers and the energy market as a whole, and said that the company will demonstrate this to the CMA.

Write to Carlo Martuscelli at carlo.martuscelli@dowjones.com

(END) Dow Jones Newswires

April 26, 2018 02:54 ET (06:54 GMT)

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