Octopus Energy Group has signed a deal to buy Shell Energy in the UK and Germany, taking on two million new home energy and broadband customers.
The Shell Energy businesses provide domestic gas, power and broadband services. The move comes after a competitive process run by Shell and includes 1.4 million household energy customers, equating to 2.5 million meter points, and 500,000 broadband customers.
The deal was signed with Shell Petroleum subsidiary Impello Limited and grows energy supplier Octopus to nearly 6.5 million household customers in the UK, now equating to over 11 million meter points.
Octopus’ customer base in Germany will grow to almost 300,000.
Shell’s retail exit
The sale follows the announcement in June from energy giant Shell about an exit from the home energy retail business in the UK, the Netherlands and Germany following a strategic review of market conditions.
The company’s Dutch operations are winding down and in the process of transition.
“This agreement follows the announcement during our Capital Markets Day to divest our home energy retail business in Europe,” said Steve Hill, executive vice president for Shell Energy.
“To drive performance, discipline and simplification, we are prioritising countries, projects, and routes to market where we can deliver the most value. We will work closely with Octopus to ensure a seamless transition and continued high standards of customer service.”
Other home energy supply markets for Shell in the USA and Australia, where there is integrated value, as well as Shell’s wholesale and small to medium enterprise (SME) customer supply businesses under the Shell Energy brand, are not included in this sales agreement.
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Significant growth for Octopus Energy
Octopus Energy is headquartered in the UK and operates in 15 countries, with significant businesses in energy retail, generation, technology and electric vehicles.
The company has to date received over $1 billion in investment from global giants, including investment funds, pension funds and large energy companies.
As part of the agreement, Shell and Octopus Energy have also signed a memorandum of understanding to explore a potential international partnership, planning to collaborate in electric vehicle charging for customers in their respective Shell Recharge and Octopus Electroverse companies.
Options will be explored for possible joint promotions, brand activations and other activities across the EV value chain.
According to Octopus Energy, an analysis by management consultancy Bain & Company attributes the company with the highest approval rating of any energy company in the UK.
Octopus Energy has stated the acquisition will have “a smooth transition and no disruption to customer energy supply, all Shell energy and broadband customers will be contacted about the next steps following regulatory approval.”
The deal is expected to complete in the fourth quarter of 2023.
