UK CMA Launches Phase 1 Review of E.ON’s OVO Energy Acquisition

Britain’s Competition and Markets Authority launched its formal Phase 1 investigation into E.ON SE’s planned acquisition of OVO Energy on September 2, moving the proposed merger of two large UK retail-energy suppliers into the statutory merger-review process. The regulator has set October 28 as the deadline for its Phase 1 decision.

The CMA’s commencement notice says it now has enough information to begin examining whether the acquisition should be referred for a more detailed Phase 2 investigation. The notice also makes clear that the statutory initial period begins on September 3, the first working day after the launch notice. E.ON and OVO remain separate businesses while the review is underway, and neither company has announced immediate changes for customers.

Formal review starts after the July comment period

An invitation for interested parties to comment on the possible impact on UK competition opened on July 8, when the CMA began its E.ON/OVO case. That comment period closed on July 23. At that stage, the regulator said it had not yet begun its formal investigation and was still gathering information ahead of a possible Phase 1 launch.

On September 2, the case moved into that formal stage. The CMA said it had sufficient information about E.ON SE’s anticipated acquisition of OVO Energy Ltd, through E.ON UK Limited, to start an investigation under the Enterprise Act 2002. The regulator’s notice sets October 28 as the date by which it expects to announce whether the acquisition should be referred for a Phase 2 inquiry, although the statutory deadline can be extended in limited circumstances.

A Phase 1 launch does not itself mean the CMA has found a competition problem. Under the UK merger-control framework, the initial review is designed to determine whether there is a realistic prospect that a merger could substantially lessen competition. The CMA’s own guidance says it does not apply a fixed market-share or competitor-count threshold to reach that conclusion. Instead, it assesses the competitive effects of each case on its facts, including possible effects on prices, service quality, consumer choice and innovation.

OVO would add about four million customers to E.ON

The planned acquisition was announced by E.ON on May 11. In its group-level announcement, the German energy company said it already supplied about 5.6 million customers in the UK and expected OVO to add roughly four million more. On those company figures, the enlarged customer base would be about 9.6 million. The parties have not disclosed the purchase price.

E.ON says the acquisition would expand its UK retail business and give it more scale for digital and flexible-energy offerings. The company said E.ON and OVO together have around seven million smart meters installed and that more than 60% of their UK customers are connected digitally. Management has pointed to time-of-use tariffs, home batteries, electric-vehicle charging and other tools that can shift demand away from more expensive periods as areas where greater scale could support further investment.

OVO has framed the sale around the changing economics of UK energy retail. The company said requirements around financial resilience and regulatory oversight have increased, making scale and access to long-term capital more important for standalone suppliers. After reviewing its strategic options, OVO concluded that a sale to E.ON offered the strongest long-term platform for the business and its customers. OVO was founded in 2009 and later expanded substantially through its acquisition of SSE Energy Services.

OVO’s UK energy retail business and the employees who support those customers are included in the E.ON deal. OVO separately agreed to sell its Home Services operation, which includes boiler insurance and servicing, to Hometree, subject to its own approval process. That separate sale is not the acquisition described in the CMA’s E.ON/OVO merger inquiry.

For customers, both suppliers have said the position is unchanged during the regulatory review. E.ON said existing tariffs will be honoured and service will continue without change while approval is pending. OVO has likewise told customers that their supply, tariffs, balances and account arrangements remain the same for now. The companies will continue to operate independently until regulatory clearance is obtained and the acquisition closes.

After completion, E.ON plans to keep the existing Kaluza energy-intelligence platform licence for OVO’s customer base. The platform supports energy billing and product development, and the companies also plan to evaluate whether Kaluza could be adopted more broadly elsewhere in the E.ON group.

October 28 is the next regulatory deadline

The central question for the CMA is whether combining the two suppliers could reduce competitive rivalry enough to create a realistic prospect of a substantial lessening of competition in a UK market. The regulator’s September 2 materials do not identify any specific theory of harm or say that it has reached a preliminary adverse view. The formal launch means the evidence-gathering and statutory assessment are now underway.

At the end of Phase 1, the CMA can clear a merger if it does not identify competition concerns that meet the legal test for referral. If it concludes that the test is met, it can refer the acquisition to Phase 2 for a deeper investigation. The merging companies can also have an opportunity to offer undertakings in lieu of a Phase 2 reference if the regulator identifies concerns that can be addressed through remedies.

When it announced the deal in May, E.ON said it expected closing in the second half of 2026, subject to regulatory approvals. The CMA timetable now provides a concrete date inside that window: October 28 is the current deadline for the UK competition regulator’s Phase 1 decision. Until the review is resolved and closing takes place, E.ON Next and OVO are expected to remain legally and operationally independent.