SSE Ends Proposal to Merge Services Business With Innogy's Npower
December 17 2018 - 2:52AM
Dow Jones News
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)
Copyright (c) 2018 Dow Jones & Company, Inc.
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