Belfast man's firm to buy SSE's supply division in £250m deal
An energy challenger set up by a Belfast man is set to buy SSE's electricity and gas supply business - though the deal won't include its Northern Ireland customers.
Ovo Energy, founded by Stephen Fitzpatrick, plans to pay £250m upfront for the struggling household supply division, with the promise of further payments.
The deal would add SSE's 5.7 million domestic accounts to Ovo's 1.5 million, leaving British Gas as the only company with more (12 million).
SSE confirmed that while discussions were continuing "no final decisions have been taken and no agreements regarding the terms of any transaction have been entered into".
A deal with Ovo would mark the end of SSE's attempts to offload the division and focus on generating and distributing energy. Profits at its supply arm dropped from £260m to £84m last year.
SSE tried to merge the division, which employs 9,000 staff, with Npower last year, but the deal collapsed over concerns about the impact of the energy price cap.
Officials in the business department, Treasury and watchdog Ofgem are understood to be making contingency plans for the possible failure of a big energy supplier.
Stephen Fitzpatrick set up Bristol-based Ovo in 2009 with £350,000 and still owns a majority stake.
The 41-year-old has previously warned that the established energy suppliers were facing a "Kodak moment" of extinction.
Ovo posted a profit of £6m in 2017, down from £23.8m the year before, according to its latest available accounts.
Japanese conglomerate Mitsubishi Corporation took a 20% stake in Ovo in May this year, valuing the company at £1bn.
Mr Fitzpatrick also bought Formula One team Manor Racing in 2015, but it was an unhappy foray into the sport, as he lent it £19.4m before it went bust.