EON Weighs Sale of UK Business Energy Supplier Npower (2023)

EON SE is exploring a sale of a UK unit supplying energy to large businesses, people with knowledge of the matter said, becoming the latest power company to seek an exit from a sector generating slim returns.

Author of the article:

Bloomberg News

Todd Gillespie, Aaron Kirchfeld and Dinesh Nair

Published May 18, 2023 • Last updated 6days ago • 2 minute read

Join the conversation

Article content

(Bloomberg) — EON SE is exploring a sale of a UK unit supplying energy to large businesses, people with knowledge of the matter said, becoming the latest power company to seek an exit from a sector generating slim returns.

Story continues below

This advertisement has not loaded yet, but your article continues below.

THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY

Subscribe now to read the latest news in your city and across Canada.

Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.
Daily content from Financial Times, the world's leading global business publication.
Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
Daily puzzles, including the New York Times Crossword.

SUBSCRIBE TO UNLOCK MORE ARTICLES

Subscribe now to read the latest news in your city and across Canada.

Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.
Daily content from Financial Times, the world's leading global business publication.
Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
Daily puzzles, including the New York Times Crossword.

REGISTER TO UNLOCK MORE ARTICLES

Create an account or sign in to continue with your reading experience.

Access articles from across Canada with one account.
Share your thoughts and join the conversation in the comments.
Enjoy additional articles per month.
Get email updates from your favourite authors.

Don't have an account? Create Account

View more offers

EON Weighs Sale of UK Business Energy Supplier Npower Back to video

The German group is working with advisers to gauge buyer interest in Npower Ltd., according to the people, who asked not to be identified discussing confidential information. Npower is one of the largest suppliers to industrial users in the UK and delivered more than 20 terawatt-hours of electricity in 2021, about 6% of the country’s total consumption.

Financial Post Top Stories

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Discussions about a possible sale of Npower are ongoing and there’s no certainty they’ll result in a transaction, the people said. A spokesperson for EON said the company is focused on serving its customers “during the current market volatility,” declining to comment further.

Shares in EON were broadly flat in early trading on Friday. The stock was trading at €11.08 at 9:15 a.m. in Frankfurt, giving the company a market value of €29.3 billion ($31.6 billion).

Advertisement 3

Story continues below

This advertisement has not loaded yet, but your article continues below.

EON’s deliberations come at a time when energy suppliers are reassessing their relationships with business customers. They’ve been reluctant to lock in contracts because of pricing volatility, while businesses are asking for more “blend and extend” deals to help them spread payments over a longer period.

Last year, Centrica Plc said it would stop selling power and natural gas to its biggest business customers as surging wholesale energy costs hit profit margins. Scottish Power Ltd. also announced plans to gradually stop supplies to British businesses.

EON warned earlier this month Europe’s energy crisis — exacerbated by the Russian invasion of Ukraine — is not over. In the UK, about 30 energy firms have collapsed after finding it hard to pass on surging wholesale prices to customers.

Marc Spieker, EON’s chief financial officer, said last week that the company’s expectation for adjusted 2023 earnings to remain broadly in line with 2022 “factors in the possibility of a further deterioration in the remainder of the year.”

EON has owned Npower, a former RWE AG subsidiary, since 2020. Npower swung to a loss of £149 million ($185 million) in 2021, according to its latest accounts filed with the UK’s Companies House.

(Adds shares in fourth paragraph.)

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Join the Conversation

CIBC hikes dividend as profit beats expectations
RBC misses expectations as costs and credit loss provisions eat into profit
Many Canadians are leaving this registered savings plan's money on the table
Howard Levitt: Alberta decision could open floodgates for harassment lawsuits
World's biggest nuclear plant may stay closed due to papers left on car roof