Opus Energy is to be sold to Drax Developments Ltd dependent on shareholder approvals.
Drax Developments Ltd, a subsidiary of the Drax Group is expected to complete the 100% sale of Opus Energy. Opus is the UK's sixth biggest energy supplier and provides gas and electricity to over 260,000 sites across the country. The sale is not expected to be finalised until early next year and is conditional on approval by its shareholders.
Drax Group, a FTSE 250 company is one of the largest energy producers in the country and employs over 1400 people across its sectors which include; electricity generation, power supply and compressed wood pellet manufacturing.
In a statement released by Opus Energy's Director, Steve James he said: "Drax Group's generating capacity will enhance and support the business's continued ambitious growth plans.
In addition, the complementary nature of Drax Group's retail subsidiary, Haven Power, with its focus on the large I&C sector, along with Opus Energy's SME and corporate multi-site servicing expertise brings a new and exciting opportunity for the market."
Opus also reassured its customers that existing contracts will be unaffected and their current support service will not be altered.
Drax claimed it was looking to diversify across markets and improve earnings in its half-year results presentation in July. The sale of Opus Energy is expected to cost in the region of £340m and Drax also has plans to acquire four gas-fired (OCGT) power plants for a further £18.5m; the four projects will have a combined generation capacity of 1.2GW.
The group currently operates the largest power station in the UK, also named Drax which has recently undergone a conversion so 70% of the electricity it generates comes from biomass rather than coal. More units at the Yorkshire facility could be converted from coal to biomass "with the right conditions".
The UK faces supply concerns over coming winters as coal-fired power plants are being forced to close by 2025 and various nuclear reactors are reaching the end of their lifespan. As a result, the government are encouraging investment in new gas power stations to help ease these concerns.
Drax's Chief Executive Dorothy Thompson said: "The acquisition of four OCGT development projects will play an important role in helping the government meet their ambition of new gas generation."