Germany’s E.ON is in advanced talks to acquire UK supplier Ovo for £550mn‑£600mn. The deal would merge E.ON’s 5.6 million‑customer UK arm with Ovo’s 4 million‑plus base, creating the country’s largest household energy provider. Negotiations could close within weeks, signalling a fresh wave of consolidation ahead of regulatory review.

Ovo, founded in 2005 by Stephen Fitzpatrick, once challenged the Big Six and grew after buying SSE’s retail arm for £500 million. The company faced debt and capital‑adequacy hurdles, prompting a deal hunt in February. Interest also came from Engie, EDF and Utility Warehouse, but E.ON’s bid appears strongest to support its expansion strategy in the UK.

The acquisition would give E.ON access to Ovo’s 9.6 million customers, boosting scale to counter thinner margins and fend off rivals like Octopus Energy, which overtook British Gas last year. The deal excludes Ovo’s Kaluza software, a separate asset that remains with the company and is licensed globally for customers and supply data services worldwide today.

E.ON’s move reflects a broader trend of legacy energy firms consolidating to survive volatile wholesale prices and regulatory pressure. If finalized, the merger would place the combined entity at the top of the UK market, potentially reshaping pricing dynamics and customer choice. Regulators will scrutinise the deal for competition concerns before approval by the European.