SSE to Merge its Energy Retail Business in Great Britain with Npower

Published: Nov 08 2017
Deal Summary

SSE Plc, a power generation, transmission and distribution company, has agreed to merge its household energy and services business (SSE Retail) in Great Britain with npower Group plc (Npower Ltd), a subsidiary of Innogy SE, to form a new independent UK incorporated company.

The combined retail company will be majority held by SSE shareholders (65.6%) with minority participation by innogy (34.4%). The shares of the combined retail company will be admitted to the premium listing segment of the official list and to trading on the main market of the London Stock Exchange on completion of the combination. innogy intends to retain all of its 34.4% holding in the combined retail company for a period of at least six months from admission.

Prior to the transaction, SSE will demerge SSE Retail by declaring a dividend in specie to SSE shareholders or by a repayment of capital. In each case, this would be satisfied by the transfer of SSE Retail to the combined retail company and the issue of shares in the combined retail company to SSE shareholders on a pro-rata basis. Following this demerger, Innogy will contribute npower to the combined retail company in consideration for the issue of shares in the combined retail company to innogy. Upon completion of the transaction, the combined retail company will have an appropriate level of debt, commensurate with an investment grade credit rating.

It is intended that the composition of the board of the combined retail company will comply with the provisions of the UK corporate governance code. innogy will have the right to nominate two representative directors to the board of the combined retail company if it holds 20% or more of the shares in the combined retail company and one representative director if it holds from 10 to 20% of the shares in the combined retail company. The Chairman designate, CEO designate and CFO designate will be appointed jointly by SSE and innogy.

Credit Suisse International is acting as financial advisor to SSE for the transaction.

Completion of the transaction is subject to necessary shareholder and regulatory approvals and other conditions. It is expected that the transaction will be completed by the last quarter of 2018 or the first quarter of 2019.

Goldman Sachs Group Inc is acting as financial advisor to npower while Credit Suisse Group AG is acting as financial advisor to SSE Retail for the transaction.

Deal History:

On November 7, 2017, SSE intended to merge its energy retail business in UK with its energy retail business of innogy.

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