British energy giant SSE has announced that it will complete today’s £ 500 million sales of its energy services arm to Ovo Energy, opening the way for the company to focus on its portfolio of renewables.
The transaction, which will see Ovo Energy gain control of the SSE household energy and services sector, will allow SSE to use the deal’s net proceeds to reduce its net debt.
The arrangement will see Ovo Group, an Ovo Energy company, pay the amount in cash by £ 400 m, and £ 100 m in loan notes.
SSE is the UK’s third-largest energy provider, with about 3.5 million household customers and 8,000 staff.
Around 8,000 employees will be moved from SSE to Ovo, it is known.
Ovo is currently the biggest independent energy supplier in the UK, with 1.5 million customers and nearly 2,000 employees.
SSE plc Chief Executive Alistair Phillips-Davies said: “We are very pleased to complete this deal, which we strongly believe is the best outcome for the company, its customers and its employees.
“Sales are in line with our clear strategy, focused on developing, running, and owning assets from renewable energy and electricity networks, along with growing businesses complementing this center.
Mr. Phillips-Davies said that the deal made SSE a “more focused group”
Thanks to the new construction of the 84-turbine Beatrice Offshore Wind Farm at Outer Moray Firth and the proposed Seagreen project, SSE currently has the largest offshore wind portfolio in the world, a sequence of seven giant wind developments off Scotland’s east coast.
The company also operates many onshore wind projects such as Stronelairg, a 66 turbine wind farm near Fort Augustus, and the Bhlaraidh wind farm northwest of Invermoriston, through its clean energy affiliate SSE Renewables.
It also has many hydro-systems in Scotland.
OVO CEO and Chairman Stephen Fitzpatrick said: “This is a very exciting day. It marks the end of one chapter for OVO but, more importantly, along with the SSE Energy Services business, the beginning of the next one.
“We launched OVO with a bold desire to do more for customers, and have ever since remained true to that dream.