Ovo energy customers urged not to panic as takeover planned

Consumer groups have urged customers of energy supplier Ovo not to panic after rival E.On announced plans to buy the company.

All existing tariffs will be honoured in full and their gas and electricity service will be unaffected under the planned deal, consumer group Which? said.

The takeover is set to create one of Britain's largest energy suppliers, vying with Octopus for the top spot.

E.On, which has 5.6 million customers, and Ovo, with four million customers, will continue to operate separately before any decision on a deal being approved, which could come later this year.

The value of the deal has not been disclosed, though previous reports have estimated it could be worth as much as £600m. The takeover will be checked by regulators, before any approval is granted.

Both firms said there would be no change for customers while regulators reviewed the deal and that tariffs - such as fixed deals - would be honoured for the duration of the contract.

Emily Seymour, energy editor at consumer group Which?, said: "If you're an Ovo customer, don't panic, your gas and electricity supply will continue as usual.

"E.On have assured customers that existing tariffs will be honoured in full and service will continue unchanged. You don't need to do anything and you're still able to switch supplier if you wish."

Sabrina Hoque, from the price comparison website Uswitch, said that Ovo customers might be nervous.

But she added that, even if the deal were approved, credit balances would be protected as customers would transferred across automatically.

Of given the go-ahead, the merged company would be battling Octopus for position as the biggest energy supplier in Britain. Domestic market share can be measured in different ways. If dual fuel consumers were counted once, then a merged E.On and Ovo would be bigger. If gas and electricity accounts were counted separately, then Octopus would be bigger.

Tom Goswell, at energy consultancy Cornwall Insight, said larger suppliers brought "stability, resilience, and the ability to invest" but could reduce consumer choice.

Marc Spieker, chief operating officer commercial at E.On, said that the UK was an important growth market for the company.

"Energy flexibility and electrification are becoming increasingly important and are critical to the success of the energy transition," he said.

"At E.On, we are passionate about developing solutions that enable customers across Europe to play an active role in making our energy systems both reliable and affordable."

Stephen Fitzpatrick, founder of Bristol-based Ovo, said the planned deal was the "right next step" for customers, staff and the zero-carbon transition.

The Unison union's south-west regional secretary, Tim Roberts, said: "Workers at Ovo will have understandable concerns about what this takeover could mean for their jobs, pay and conditions.

"E.On has a reputation for working constructively with unions and staff, which will be important as the deal progresses."