Perth-headquartered energy firm SSE has reassured its workforce that there will be no redundancies as it announced the sale of its domestic energy business to a rival firm.
SSE’s energy services arm, which has around 5.7 million customers, has been sold to Ovo Group in £500 million deal.
All 8,000 of SSE’s energy services staff – which include the a contact centre in Perth – will transfer to Ovo as part of the transaction.
SSE said its leadership team will work with Ovo in the coming months to plan for the integration and ensure a smooth transition for customers and employees.
Meetings are being set up with the recognised trade unions and employee forums to engage with them in the weeks and months ahead.
Last year the Perth firm previously sought to spin off this division and combine it with Npower but the merger collapsed in December.
SSE said it had already separated its energy services business from the rest of the group so their teams are in separate and distinct parts of the SSE estate.
It also gave an assurance that SSE Group Plc will continue to be headquartered at Inveralmond House in Perth and that in the meantime, there will be no changes for employees and customers.
SSE chief executive Alistair Phillips-Davies added: “We have long believed that a dedicated, focused and independent retailer will ultimately best serve customers, employees and other stakeholders – and this is an excellent opportunity to make that happen.
“Ovo shares our relentless focus on customer service and has a bold vision for how technology can reshape the future of the industry.
“I’m confident that this is the best outcome for the SSE energy services business.”
The deal, which is subject to approval by the Competition and Markets Authority is expected to complete later this year or early next year.
The move will will turn Ovo into one of the UK’s largest energy suppliers overnight, having been founded just 10 years ago.
Scottish Conservative MSP Murdo Fraser said it was “reassuring” to hear there won’t be any job losses at SSE’s Perth office but wants to know what Ovo’s future plans are for the workforce there.
He said: “Any change will be worrying for employees, but it’s reassuring to hear that there will be no job losses.
“I look forward to hearing from Ovo concerning what their plans are for the future of the business.
“This is a major employer in Perthshire and it would be good to hear that there will be future investment and more jobs created.”
SSE is the third largest supplier in the UK energy market, with around 3.5 million household customers and 8,000 staff.
Independent provider Ovo has around 1.5 million customers and about 2,000 employees.
Gas and electricity suppliers have come under intense pressure in the UK following this year’s introduction of the cap on standard variable tariffs, as well as increasing competition from a swathe of smaller players.
In May, SSE announced plans to offload its energy services segment after more than half a million households switched to a new supplier in the year ending March 2019.
Stephen Fitzpatrick, founder and chief executive of Ovo, hailed the deal as a “significant moment for the energy industry”.
He said: “For the past three years Ovo has been investing heavily in scalable operating platforms, smart data capabilities and connected home services, ensuring we’re well positioned to grow and take advantage of new opportunities in a changing market.
“SSE and Ovo are a great fit. They share our values on sustainability and serving customers. They’ve built an excellent team that I’m really looking forward to working with.”
The sale comes after a difficult 12 months for SSE, which admitted on reporting its annual results recently that its wider business “fell well short” of its hopes in 2018-19 and warned that 2019-20 earnings would also be hit.
