E.ON Next finalized its purchase of Ovo Energy on Thursday following regulatory approval from Britain’s competition watchdog, consolidating the household energy market further. The transaction gives E.ON Next control of approximately 25% of the market, or 13.45 million gas and electricity accounts, positioning it as the second-largest supplier behind Octopus Energy, which holds 26% of the market. British Gas ranks third with approximately 23% of accounts.
The completion of the deal intensifies concerns about reduced competition in the energy sector. Nearly three-quarters of Great Britain’s households now receive service from just three suppliers, while approximately 90% of the market will be controlled by five suppliers when including EDF Energy and Scottish Power. This development reverses a decade of efforts to dismantle the dominance of the “Big Six” suppliers that historically controlled the market.
The original Big Six—British Gas, EDF Energy, E.ON UK, SSE, Scottish Power, and npower—held roughly 85% of the market in 2016. A landmark investigation that year concluded consumers were overpaying between £1.4 billion and £1.7 billion annually due to weak competition. While a wave of new suppliers emerged after 2016, the market contracted substantially beginning in 2019 when SSE divested its household business to Ovo. The situation worsened during the 2021/22 energy crisis when dozens of suppliers ceased operations.
E.ON UK’s chief executive Chris Norbury characterized the market as “fiercely competitive” and stated the company’s combined scale would enable it to serve customers effectively. However, industry analysts emphasized concerns that consolidation reduces incentives for price competition and innovation. Observers noted that while larger suppliers provide market stability—a benefit following the exit of approximately 30 firms—fewer competitors may diminish pressure to maintain low prices and diverse offerings.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI