Octopus Energy and Co-op Energy have agreed a significant strategic energy partnership which will Octopus take on more than 300,000 additional customers.
Rumours abounded earlier this month that Octopus was to acquire Co-op Energy outright, however the deal announced today is slightly different than first reported. Octopus will take ownership of the customers of all three energy supply brands owned by Midcounties Co-operative, including Co-op Energy, Flow and GB Energy.
However the Co-op Energy brand is to remain, and The Midcounties Co-operative will retain responsibility for acquiring new customers under that brand. GB Energy and Flow will be absorbed by Octopus.
Co-op Energy only acquired Flow Energy last year in a deal that sparked shareholder revolt at Flow’s original owner Flowgroup. Rival supplier OVO was said to have expressed a keen interest in the firm, leading Flowgroup shareholders to demand that the bid be considered.
Octopus’ customer numbers will swell to “well over a million” as a result of the transaction, all of which will be managed under the supplier’s proprietary tech platform, dubbed Kraken.
The agreement was completed for an undisclosed sum.
Greg Jackson, chief executive at Octopus Energy, said the deal represented “another step on the road” to improving the UK energy retail market.
Midcounties Co-operative CEO Phil Ponsonby talked up the impact independent energy suppliers were having in providing fair prices to consumers and disrupting the Big Six, but admitted it had placed different strains on suppliers all the same.
“The market is now more competitive than ever, and it is clear to us that having the best technology is absolutely critical to delivering the best service to customers while maintaining a sustainable business for the longer term. Octopus have developed what we consider to be the most innovative and customer focussed technology anywhere in the industry today,” he said.
Meanwhile, the agreement will also see Octopus and Co-op Energy establish a joint venture to develop the UK’s community energy market, which has experienced a period of sharp decline since government cuts to renewables subsidies and the abolition of tax credits for community energy investments.
The joint venture will invest in community energy provides, provide support to community groups and increase the amount of energy purchased directly from community energy initiatives, aiming to encourage more small-scale generation in the UK.