Energy major Shell has agreed to sell its household energy business to Octopus Energy.
Shell’s retail energy business has 1.4 million customers. Pending regulatory approval and completion of the deal, this will likely take Octopus to 6.5 million customers and make it the second biggest energy supplier in the UK, behind only British Gas, which is owned by Centrica and has 7.5 million customers. No financial details of the deal were disclosed, but the business has been previously valued at between $50 million and $100 million.
Octopus Energy Group’s founder and CEO, Greg Jackson, said about the deal:
“Octopus has proven that it delivers game-changing service whilst innovating and investing relentlessly towards a cheaper cleaner energy system. Our commitment to customers is paramount, and we will do whatever it takes to deliver the Octopus promise when we welcome these new customers too.”
In recent years, the energy retail sector has been squeezed between high wholesale energy costs and the Ofgem-imposed cap on prices. It was, therefore, no surprise that Shell announced it was exiting the retail energy business at its Capital Markets Day. This will allow it to focus on other aspects of its business, such as the production of energy products and lubricants like gear oil and commercial vehicle oil.
Octopus said in a statement that Shell Energy customers did not need to do anything at this point in time. It said they would be contacted following regulatory approval and completion of the deal, which is expected towards the end of the year.
