As a result of an agreement in which the two businesses investigate an arrangement on EV charging, Shell (SHEL.L) announced on Friday that it will sell its primary energy operations in the UK as well as Germany with British energy provider Octopus Energy Group.
The last four years have seen pressure on profits in the British power retail industry as businesses battled rising wholesale costs and an Ofgem-imposed cap on the prices they could charge customers.
Shell Petroleum Senior Vice-President Steve Hill stated, “This deal complements the announcement made during our Markets in Capital Day of the sale of our primary gas retail business in Europe. He claimed that the business was concentrating on initiatives and nations where it thought it could add the most value.
Around two million clients are served by the subsidiaries of Shell Energy Retail Ltd in the United Kingdom & Shell Energy Retailing GmbH in Germany, which both function under the umbrella of the Shell Energy brand.With about 6.5 million users, Octopus would likely surpass Centrica’s (CNA.L) British Gas, which has about 7.5 million retail customers, as the second-largest residential energy provider in Britain after the takeover.
One of the biggest energy providers, Bulb, collapsed in 2021 as a result of skyrocketing wholesale gas and power rates. Octopus this year purchased rival Bulb. Customers of Shell Energy Retail should wait for the acquisition to close, which is anticipated to happen in the final quarter of 2023 pending regulatory approval. Customers will be informed at that time, according to Octopus.
Although the deal’s financial terms were not immediately made public, experts have previously estimated its value to be between $50 and $100 million.
In order to explore a potential global alliance for the charging of electric vehicles (EVs), particularly for Shell Recharge customers, Shell and Octopus additionally executed a memorandum of understanding.