RWE npower and Telecom Plus have agreed to the sale of RWE npower Limited’s subsidiary companies, Electricity Plus and Gas Plus, to Telecom Plus Plc, the owner of the Utility Warehouse brand. The transaction is subject to both the approval of Telecom Plus shareholders and the OFT. Completion is expected in late December or early January.
Once complete, this transaction will result in Utility Warehouse further enhancing its position as a major force in the UK energy supply market with more than 770,000 customer accounts nationwide.
Telecom Plus Plc will pay Npower Limited an initial £196.5m (US$316 million) for the companies and their electricity and gas customer accounts, with a further £21.5m (US$36 million) paid after three years. Telecom Plus and RWE npower have also agreed a new wholesale supply agreement, under which npower will continue to supply electricity, gas and other services to Electricity Plus and Gas Plus for the next 20 years at a more competitive rate.
Paul Massara, CEO RWE npower, said, “In one move we have helped to create the biggest independent competitor in Britain’s household energy supply market. This is good for competition and good for consumer choice. Today’s announcement shows that Britain is well on the way to having a Big 7 rather than a Big 6.”
Both Electricity Plus and Gas Plus have expanded substantially over recent years and we are pleased to be able to provide long term support for an entrant which now has more than 770,000 customer accounts nationwide. This shows that there is a willingness to compete in Britain’s energy market, and that the market is anything but broken. This is good news for Utility Warehouse customers, for npower, and for the energy industry."
Charles Wigoder, Executive Chairman Telecom Plus said,“This is a transformational deal for the company, delivering significant earnings enhancement, a revised and improved twenty year supply agreement with npower and the opportunity for us to provide even more competitive energy prices to our customers in future. The combination of these will play a major role in helping us accelerate our current rate of high quality organic growth, and achieve our goal of supplying our unique multi-utility proposition to more than one million households over the medium term.”