Eon, Hometree strike deals to snap up parts of Ovo Energy
Two arms of Ovo Energy have been snapped up by separate buyers, ending uncertainty over the retail energy giant’s future.
German energy firm Eon is to acquire Ovo’s retail business, creating one of the UK’s biggest energy operators with around 10m combined customers, while Ovo’s Home Services arm, including Corgi Homeplan and Homepeat, is to be picked up by London-based Hometree in a deal backed by private equity firm Pollen Street.
Both firms declined to disclose the size of the transactions but Hometree said it “paid a fair price” and that “Ovo shareholders are receiving a significant sum of capital for the deal.”
“As the UK energy system evolves, flexibility will be central to keeping costs down and improving resilience,” Eon said in a statement.
OVO’s future had been in doubt since the energy company, founded by entrepreneur Stephen Fitzpatrick, last year warned there was a “material uncertainty” over its ability to continue trading.
The firm, which has around 4m customers across the UK, was told by energy regulator Ofgem it failed to meet new financial resilience standards put in place after the collapse of a number of energy suppliers following a spike in prices in 2022.
OVO is understood to have been on the lookout for a rescue buyer for a number of months in a bid to turn around the company’s fortunes. Collapsing into a Special Administration Regime (SAR) was a possibility if a buyer could not be found.
Hometree chief executive Simon Phelan told Morning Wire: “We think that the retail energy supply market is at a huge crossroads. Ofgem created the opportunity for new challengers to come into the market…[then we saw] the smaller challengers falling away and the capitalisation challenges that they had.
“Ofgem has reverted very hard to make it incredibly challenging for players to operate in that market unless you are at an enormous scale…we expect that there will be [more] consolidation [in the market].”