The Fall of OVO: Why the 'Big Six' Firm is Selling to E.ON

If you follow the English Premier League, you’ll be familiar with the concept of the “Big Six” – the group of clubs considered the most prestigious in the country.

That, however, is not the only illustrious sextet in the UK. 

For decades, the British energy sector has had its own Big Six, made up of the energy providers with the largest market shares across the UK.

For years, the pre-eminent forces in the country’s gas and energy sector were EDF, E.ON, British Gas, npower, Scottish Power and SSE, though, as is the case in football, the supremacy of these leaders is never quite set in stone.

More recently, the make-up of the Big Six has shifted, following some meteoric rises and strategic acquisitions.

E.ON acquired npower in 2019, while newcomers OVO and Octopus rose to prominence, with the former buying out SSE’s retail arm in 2020.

Now, after a few years of stability, the tectonic plates beneath the UK’s energy landscape appear to be moving once again, following the huge news that E.ON is planning to acquire OVO imminently.

E.ON‘s planned acquisition of OVO

E.ON’s planned acquisition of OVO is one of the most significant stories in the domestic retail energy market in years.

E.ON announced the move on 11 May, saying that the proposed deal would combine E.ON’s 5.6 million customers with OVO’s four million account base and create a business capable of challenging Octopus for dominance in Britain’s consumer energy market.

The financial terms of the proposed deal have not been disclosed yet, although earlier reports valued OVO at as much as £600m, or about US$798m.

For E.ON, the acquisition is about scale, but it is also about positioning itself well for the next phase of the energy transition.

The company is betting that future competition in retail energy will centre on flexibility services, home electrification and digital control of household energy demand rather than traditional supply alone.

Chris Norbury, the CEO of E.ON UK, sees the transaction as a response to structural changes in the energy system.

“For decades the UK energy system focused too much on those upstream,” he says. 

“Now is our opportunity to change that. 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 adds.

E.ON has said that the acquisition will strengthen its ability to expand time of use tariffs, smart charging services and integrated home energy solutions.

The company argued that combining larger customer numbers with digital platforms would allow households to become more active participants in balancing the electricity system.

OVO’s difficult recent history

The proposed takeover comes after a sustained period of turbulence for OVO.

The supplier, founded in 2009 by Stephen Fitzpatrick, built its reputation as a disruptive challenger brand attacking the dominance of the traditional Big Six.

That image weakened sharply during the energy crisis of 2022, following Russia’s invasion of Ukraine.

At the time, OVO was facing a great deal of criticism over its customer communications as energy bills soared.

It then came under some financial pressure as Ofgem began tightening its resilience requirements for energy firms.

The company has spent the past year attempting to reassure regulators and investors over its balance sheet, all while restructuring operations.

Late last year, reports suggested that OVO was looking for around £300m (US$405m) in fresh investment, while it was also considering its asset sales linked to its Kaluza software platform, which Stephen Fitzpatrick now heads up.

OVO also announced its plans to cut around 200 jobs as part of efforts to meet tougher regulatory capital standards.

It is against that backdrop that E.ON’s offer comes.

Industry analysts have argued that suppliers now require deeper balance sheets and stronger digital infrastructure to survive in an environment shaped by tighter regulation and volatile wholesale markets.

Tom Goswell, the Energy Supply Lead at Cornwall Insight, says that larger suppliers could bring OVO some “stability, resilience and the ability to invest,” though he also suggests that mergers and acquisitions also have the potential to reduce consumer choice across the UK.

Regulation and competition concerns

While E.ON has spoken openly about its intentions, the deal will still have to pass regulatory scrutiny before it is completed.

That said, the company expects to have the deal approved in the second half of 2026, until which point both companies will continue operating independently.

Consumer groups were quick to reassure households worried about disruption.

Emily Seymour, Energy & Sustainability Editor at Which?, has said that OVO customers should not panic.

“E.ON have assured customers that existing tariffs will be honoured in full and service will continue unchanged. You don't need to do anything and you're still able to switch supplier if you wish.”

Questions are also likely to emerge around competition in the retail sector.

The UK energy market has already undergone rapid consolidation following the collapse of dozens of smaller suppliers during the energy crisis.

A successful takeover would further concentrate market share among a smaller group of major providers with the financial capacity to absorb regulatory costs and invest in low-carbon tech.

What’s in it for E.ON?

E.ON insists that the rationale goes beyond market dominance.

Chris Norbury says that the company has selected OVO because of its digital capabilities and its approach to innovation.

“It is not about scale for its own sake,” he says. “It is about building a retailer with the capability, the technology and the customer base to make new energy work for everyone.”

Kaluza is also regarded as an important part of this deal.

E.ON confirmed it will continue licensing Kaluza for OVO’s customer base after completion and will examine whether the platform can be deployed more widely across E.ON’s international operations.

That detail may ultimately prove as strategically important as the customer numbers themselves.

As suppliers compete to manage electric vehicle charging, heat pumps, batteries and flexible demand at scale, software platforms capable of coordinating millions of connected devices are rapidly becoming core infrastructure for the energy transition.

For Britain’s retail energy market, the proposed takeover signals another decisive step towards that model.

As E.ON’s Chief Operating Officer, Ramona Vlasiu, says: “Today is an exciting step that reflects E.ON’s continued commitment to the UK market and our ambition to build a retailer with the scale, capability and technology to play a leading role in the energy transition.”