E.ON Is Buying OVO Energy.
Here's What Happens Next.

What's happening

E.ON SE, the German energy giant, is in advanced talks to acquire OVO Energy, the UK's fifth-largest domestic supplier, in a deal that industry sources have valued at between £550 million and £600 million. According to Sky News, talks accelerated significantly in the week of 21 April 2026. Both sides are now working towards a deal that could be announced within weeks.

OVO Energy serves around 4 million UK households under the OVO brand. E.ON's UK retail arm, trading as E.ON Next, supplies around 5.6 million. A combined entity would serve 9.6 million UK customers. That places it ahead of Octopus Energy (around 6.5 million UK households, 25% market share) and ahead of British Gas (about 10 million total accounts, with declining share). The deal would mark the most significant consolidation in UK retail energy since Bulb's 2021 collapse and acquisition by Octopus.

Why is OVO Energy being sold?

OVO's position in 2026 is more precarious than its scale suggests. Founded in 2009 by Stephen Fitzpatrick with a simple proposition (cheaper, greener energy and a better digital experience), OVO grew rapidly. It benefited from the mass exit of smaller suppliers during the 2021-22 energy crisis, absorbing customers from collapsed providers including Simplicity Energy, Igloo and Smaller Earth.

But 2022 and beyond proved difficult. OVO had limited upstream hedging in place when wholesale prices surged. It lost around half a million customers in 2023 and has since been exploring options to either raise capital or sell its retail energy business. In early 2026, analysts at Watt-Logic described OVO's financial position as "shaky", noting significant debt and a challenging path to profitability where the price cap constrains retail margins.

Fitzpatrick retains separate control of Kaluza, OVO's energy software and smart grid platform, which he founded in 2019 and returned to lead as CEO in March 2026. Kaluza has expanded to serve four major utility clients across eight markets. It was reported in 2025 to be exploring a sale at a "unicorn" valuation (above £1 billion). The current discussions suggest the OVO retail customer base and the Kaluza platform are likely to be separated. E.ON is understood to be acquiring the supply business, while Fitzpatrick may retain Kaluza independently.

Who are E.ON in the UK?

E.ON SE is a Düsseldorf-headquartered utility with operations across Europe, supplying around 50 million customers globally. In the UK, the company trades as E.ON Next. The brand was launched in 2021 following the acquisition of npower's retail customer base, which added around 2 million accounts to E.ON's existing UK book.

E.ON Next is a Kraken platform business. In a notable licensing agreement, E.ON uses the Octopus-developed Kraken technology stack to run its customer accounts. That relationship gives E.ON some of the best digital infrastructure in the market without having built it internally. It also means any OVO customers brought into the E.ON Next platform would move onto Kraken, likely a meaningful improvement from OVO's current systems.

OVO's history: from challenger to question mark

What the deal means for the competitive landscape

UK retail energy has been consolidating steadily since the 2021-22 supplier collapse wave wiped out around 30 smaller operators. That consolidation has produced a market increasingly dominated by three players: Octopus Energy, British Gas (Centrica), and whoever emerges from the E.ON/OVO discussions.

An E.ON/OVO combined supplier at 9.6 million customers and around 28% market share would be a structurally different competitor to anything currently in the market. It would have the customer scale of British Gas but with more modern technology infrastructure (Kraken), without British Gas's legacy complaints record. Whether that scale is matched by the operational coherence to actually serve that many customers well depends significantly on how the two businesses are integrated.

The CMA question

Any deal of this size requires review by the Competition and Markets Authority. The CMA's Phase 1 threshold is triggered when the combined entity would have 25% or more of a relevant market, or where the deal involves a turnover above £70 million. The combined E.ON/OVO entity comfortably clears both tests in the UK domestic energy supply market.

A Phase 1 review takes up to 40 working days. If the CMA identifies competition concerns, for example around market concentration in specific regions, or the removal of OVO as a competitive constraint on pricing, it may require remedies or proceed to a Phase 2 investigation. That can take up to 24 weeks. Given that the Big Six have already consolidated significantly (npower absorbed by E.ON, SSE retail acquired by OVO, then OVO itself potentially acquired), the CMA will be watching the market structure carefully.

Less clear is whether the CMA regards a 28% supplier as a dominance concern in a market where Ofgem's price cap directly regulates unit rates and standing charges. The regulatory argument that the cap limits pricing power weighs against intervention on those grounds. Concerns about service quality and switching incentives could weigh the other way.

What does this mean for OVO Energy customers?

In the short term: nothing. Deals of this complexity take months to close even after agreement in principle, and the CMA review adds further time. OVO customers remain with OVO, on their current tariffs, with their current direct debits, until any migration is announced and executed.

If the deal closes, OVO customers are likely to find themselves migrated to E.ON Next and the Kraken platform. Whether the OVO brand is preserved or phased out is unknown. Customers who have been through the previous round of supplier transfers (from npower to E.ON Next, for example) will know that these migrations are not always seamless, regardless of the technology infrastructure underneath.

For E.ON Next customers, the more immediate question is one of service capacity. Integrating 4 million new accounts, however technically clean the migration, places operational demands on any supplier. Customers who have experienced disruption during previous large-scale migrations (Bulb into Octopus in 2022, or npower into E.ON Next in 2021) will recognise the pattern: billing queries spike, waiting times extend, and the contact centres take months to fully stabilise.

What does this mean for E.ON customers?

E.ON Next customers' tariffs, bills and account relationships are not immediately affected by a deal with OVO. The longer-term question is whether E.ON's management bandwidth and systems capacity are stretched by acquiring a business of this size. E.ON Next's customer satisfaction position is solid (better than British Gas, not as strong as Octopus). A badly executed acquisition could damage that.

What does this mean for the wider market?

A three-supplier market - Octopus, British Gas/Centrica, and E.ON/OVO - holding roughly 75% of domestic supply would represent a significant reduction in competitive diversity from the market of fifteen years ago, when well over a hundred suppliers were active. Ofgem has long argued that the price cap is sufficient to protect consumers in a concentrated market. Whether that holds as the supplier landscape narrows is a question that will be tested in the years ahead.

For Octopus, the deal changes the competitive dynamic considerably. It currently holds the position of largest supplier by electricity customer numbers, with a strong brand, high satisfaction scores, and Kraken licensing revenue supplementing its supply margins. A combined E.ON/OVO at 9.6 million customers would strip it of the scale leadership position. Octopus's global operations (it supplies customers in Japan, Germany, Texas, Australia and elsewhere) mean the UK league table is only one dimension of the comparison.

OVO Energy E.ON merger: FAQ