SSE has announced that it has scrapped plans to merge its retail business with Npower.
Big Six energy supplier, SSE has pulled out of a merger deal with Npower, citing challenging market conditions for the cancellation of the agreement which would have formed the second largest supplier in the UK.
The two companies had hoped to confirm the merger in the first quarter of 2019 following approval by the competition watchdog.
The terms of the merger were renegotiated last month as a result of the government’s planned price cap which is predicted to save eleven million customers £76 a year on their gas and electricity bills, per year.
During negotiations SSE decided that a combination of this price cap, a drop in business performance and unpredictable market conditions meant that the deal was not beneficial to its customers, employees and shareholders.
An SSE spokesperson said: “The new company would have faced very challenging market conditions, particularly during the period when it would have incurred the bulk of the integration costs.”
Last month, SSE announced increased losses for its domestic gas and electricity operations, losing 460,000 customer accounts in the process due to strong competition from other suppliers.
However, SSE has confirmed it will continue to look at viable transaction options for the firm going forward.