Ovo Energy has agreed to sell its UK retail business to the German energy giant E.ON, a move that is set to reshape the country’s household supply market. The transaction, which is subject to regulatory approvals including clearance from the Competition and Markets Authority, would create one of Britain’s largest domestic energy suppliers, serving an estimated 9.6 million customers and surpassing Octopus Energy as the market leader.
The financial terms of the deal have not been disclosed, though reports suggest it could be worth up to £600 million. Until the approval process is completed — expected in the second half of 2026 — both companies will continue to operate independently. E.ON currently serves around 5.6 million UK customers, while Ovo brings approximately four million households to the table. The combined entity is estimated to hold a market share of about 27 per cent.
E.ON said the acquisition represented “a significant investment” in the UK market and was about “accelerating consumer energy flexibility”. Chris Norbury, chief executive of E.ON UK, said the deal was an opportunity to shift the focus of the energy system away from the upstream. “Solar, batteries, EVs and a retailer built to orchestrate. That is what this deal is about: customers in control and new energy that works for everyone,” he said.
Marc Spieker, chief operating officer commercial at E.ON, said the acquisition “strengthens our retail business and underlines our commitment to be the trusted partner of choice for our customers”. He added that a larger customer base would enable faster investment in technology, products and services to support the energy transition. E.ON also sees potential to scale innovations developed in the UK — particularly flexibility solutions — across its European operations.
The combined company will have approximately seven million smart meters installed, connecting more than 60 per cent of its UK customers in what E.ON describes as a “fully digital manner”. This high level of digitalisation is viewed as a foundation for further innovation in electricity, heating and e-mobility. Norbury stressed the rationale was not about scale for its own sake: “It is about building a retailer with the capability, the technology and the customer base to make new energy work for everyone. We chose Ovo because it’s a modern digitally native business with great people and a shared belief that innovation is what can make energy affordable and sustainable for everyone.”
Under the deal, E.ON will continue Ovo’s existing licence agreement with the energy intelligence platform Kaluza, which simplifies billing, reduces costs and enables faster product innovation. The parties will also evaluate the potential adoption of Kaluza across the wider E.ON group outside the UK. Stephen Fitzpatrick, Ovo’s founder, is set to become chief executive of Kaluza, which spun out from Ovo in 2025.
For customers of both E.ON Next and Ovo there will be no changes during the regulatory review period. Existing tariffs will be honoured in full and services will continue unchanged, the companies said.
Ovo’s separate sale of Home Services
Alongside the E.ON deal, Ovo has also agreed to sell its boiler insurance and servicing arm — Home Services — to Hometree, subject to regulatory approval. The combined entity is expected to serve nearly 500,000 customers. Ovo said it would work closely with both E.ON and Hometree through the regulatory process.
Stephen Fitzpatrick, who founded Ovo in 2009 as a disrupter to the legacy big six suppliers, said the decision to sell followed a review of strategic options. “Energy retail is now more regulated, more capital-intensive and increasingly dependent on long-term investment and scale,” he said. “Bringing Ovo together with E.ON is the right next step for customers, for colleagues, and for the long-term commitment that decarbonisation requires.” Fitzpatrick is also the founder of Vertical Aerospace, a Bristol-based electric aviation company.
Ovo grew rapidly after acquiring SSE’s household energy and related services business in 2019 for £500 million. But the company faced severe financial headwinds during the gas price crisis of 2021-2022. It reported losses in 2024 — estimated at between £135 million and £167 million, according to reports — after a substantial profit of around £1.1 billion in 2023. Ovo warned of “material uncertainty” over its future and failed to meet new financial resilience standards set by energy regulator Ofgem following the wave of supplier failures. The company was forced to cut nearly a quarter of its workforce in 2022. In December last year, Ovo confirmed it was consulting on another 200 roles as part of proposals to prove compliance with Ofgem’s capital adequacy requirements.
Just a month before that announcement, Ovo’s chief executive David Buttress — a former boss of Just Eat — stepped down after only 18 months in the role. Chris Houghton returned to lead the company while Fitzpatrick, Ovo’s founder, prepared to move on to Kaluza. The deal with E.ON brings to a close the independent chapter of one of the UK’s best-known energy challengers, as market consolidation accelerates amid tighter regulation and the rising investment demands of the energy transition.
