RWE npower announces sale of subsidiaries to Utility Warehouse owner, Telecom Plus Plc, for £218m

On 19 November, RWE npower and Telecom Plus agreed the sale of RWE npower Limited’s subsidiary companies, Electricity Plus and Gas Plus, to Telecom Plus Plc, the owner of the Utility Warehouse brand. The transaction is subject to both the approval of Telecom Plus shareholders and the OFT; Completion is expected in late December or early January.

Once complete, this transaction will result in Utility Warehouse further enhancing its position as a major force in the UK energy supply market with more than 770,000 customer accounts nationwide.

Telecom Plus Plc will pay Npower Limited an initial £196.5m for the companies and their electricity and gas customer accounts, with a further £21.5m paid after three years. Telecom Plus and RWE npower have also agreed a new wholesale supply agreement, under which npower will continue to supply electricity, gas and other services to Electricity Plus and Gas Plus for the next 20 years at a more competitive rate.

Paul Massara, CEO RWE npower, said,

“In one move we have helped to create the biggest independent competitor in Britain’s household energy supply market. This is good for competition and good for consumer choice. Today’s announcement shows that Britain is well on the way to having a Big 7 rather than a Big 6.”

“Both Electricity Plus and Gas Plus have expanded substantially over recent years and we are pleased to be able to provide long term support for an entrant which now has more than 770,000 customer accounts nationwide. This shows that there is a willingness to compete in Britain’s energy market, and that the market is anything but broken.”

“This is good news for Utility Warehouse customers, for npower, and for the energy industry.”

Charles Wigoder, Executive Chairman Telecom Plus said,

“This is a transformational deal for the company, delivering significant earnings enhancement, a revised and improved twenty year supply agreement with npower and the opportunity for us to provide even more competitive energy prices to our customers in future. The combination of these will play a major role in helping us accelerate our current rate of high quality organic growth, and achieve our goal of supplying our unique multi-utility proposition to more than one million households over the medium term.”

Summary in Numbers

  • The deal enhances competition in the domestic energy supply market; Npower Limited will sell Electricity Plus and Gas Plus subsidiaries to Telecom Plus by share sale for £218m
  • On completion, over 770,000 customer accounts will cease to be included by npower within its reported customer numbers. However, these customers will see no change in their service or contracts, and will continue to be supplied in future under Telecom Plus’s Utility Warehouse brand.
  • Npower will supply Telecom Plus with electricity and gas and certain other services for these customers for the next 20 years.

Further Information

  • Telecom Plus Plc is a FTSE-250 supplier of energy and telephony services trading under the Utility Warehouse Brand.
  • The 774,735 customers accounts served by the Electricity Plus (417,878 accounts) and Gas Plus (356,857 accounts) companies, as of end of Oct 2013, will transfer with the sale of the two companies to the Telecom Plus group and trade under the Utility Warehouse name.
  • Although the Electricity Plus and Gas Plus subsidiaries are owned by Npower Limited, all their customers are being supplied under the Utility Warehouse brand and managed by Telecom Plus in accordance with a management services agreement entered into between Telecom Plus and Npower Limited in March 2006.
  • This agreement will reduce npower’s customer accounts from 5,447,181 customer accounts (3,207,815 electricity accounts and 2,239,366 gas accounts) to 4,672,446 customer accounts (2,789,937 electricity accounts and 1,882,509 gas accounts), as of end of Oct 13.

News Source: http://www.npowermediacentre.com/Press-releases/RWE-npower-announces-sale-of-subsidiaries-to-Utility-Warehouse-owner-Telecom-Plus-Plc-for-218m-12dd.aspx

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Start In Business

The Utility Warehouse was launched as a multi-level marketing opportunity.

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