The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
SSE Plc and Innogy SE terminated plans to create the UK’s second-biggest utility, the latest sign of pressure on the industry from increasing regulation.
SSE’s board decided it wasn’t in the best interest of the company to proceed with the deal to combine its retail business with Innogy’s Npower unit after it emerged last month that more cash would be needed in order to obtain an investment grade rating for the combined company. Shares of Innogy and SSE both fell after the announcement.
The deal’s collapse forced Germany utility Innogy to warn that profits this year would be lower than expected. The move reflects wider pressure on energy companies to adapt to quick shifts in both technology and the political landscape, upending the strategies executives set only a few years ago.
“This is a symptom of a bigger malaise in the market,†said Stephen Murray, who specialises in energy at MoneySuperMarket, a price comparison provider. Innogy’s unprofitable Npower division in the UK has been beset by billing issues that have caused a steady exodus of customers.