SSE merger with Npower up for further CMA scrutiny

SSE’s merger with Npower could be up for further scrutiny, it was revealed on Thursday, after the Competition and Markets Authority’s initial Phase 1 investigation found that the rivalry between the large energy companies was an “important factor” in how they set tariffs.

The regulator said the removal of such competition could therefore lead to higher prices for some customers.

“We know that competition in the energy market does not work as well as it might,” said CMA senior director Rachel Merelie.

“However, competition between energy companies gives them a reason to keep prices down.”

Merelie said the CMA had found that the proposed merger between SSE Retail and Npower could reduce that competition, and so lead to higher prices for some customers.

“We therefore believe that this merger warrants further in-depth scrutiny.”

SSE and Npower now had until 3 May to offer measures to address the CMA’s concerns.

If they did not provide such ‘undertakings’, the CMA would refer the merger for a Phase 2 investigation.

SSE was quick to respond, saying it would take its time to assess the CMA's statement.

The FTSE 100 energy firm said it continued to believe that the proposed merger would deliver benefits for the energy market and energy customers.

“We remain confident that the proposed merger will deliver benefits for customers and for the energy market as a whole and that we will be able to demonstrate this to the CMA in due course,” said SSE chief executive Alistair Phillips-Davies.

“We look forward to continuing to work constructively with the CMA and other interested parties.”