Britain's competition regulator has approved E.ON's acquisition of Ovo Energy, a decision that leaves nearly three-quarters of Great Britain's households reliant on just three major energy suppliers. The takeover was completed on 8 October, according to E.ON's announcement, marking a significant consolidation in a market that regulators have long sought to open up to competition.
The merged entity will serve approximately 9.6 million households, positioning E.ON Next as Great Britain's second-largest energy supplier with a 25% market share. This places it just behind Octopus Energy, which holds 26% of the market, and ahead of British Gas, which serves roughly 23% of households. The three suppliers will now control nearly three-quarters of all household energy accounts across Great Britain.
The takeover represents a dramatic reversal of efforts spanning more than a decade to break up the dominance of the legacy "big six" suppliers. E.ON and Ovo agreed to the sale on 11 May 2026, with the Competition and Markets Authority (CMA) launching its formal phase-one inquiry on 2 September following a public consultation period that began in July.
Why did regulators approve the deal despite competition concerns?
The CMA cleared the merger after concluding that it would not create a realistic prospect of substantially weakening competition in the market. According to the regulator's full decision, the watchdog found that E.ON and Ovo were not particularly close competitors and that both companies faced significant constraints from several strong alternative suppliers. The CMA also considered whether Ovo would have remained independent or would have been acquired by another buyer in the absence of the E.ON deal.
The regulator's phase-one investigation examined domestic electricity and gas supply across both prepayment-meter and standard customers, ultimately determining that the merger did not pose sufficient competition risks to warrant blocking or imposing conditions.
What does this mean for household energy bills?
Critics worry that fewer suppliers will reduce pressure on companies to compete on price and service quality. Tom Goswell, energy supply lead at Cornwall Insight, a leading consultancy, said:
"The big six have become the big three, and there have been questions raised over how this will impact household choice and the health of the market."
The concern reflects a broader pattern in the market. In 2016, the legacy big six suppliers—British Gas, EDF Energy, E.ON UK, SSE, Scottish Power and npower—controlled approximately 85% of the energy market. A regulator warned at that time that customers were overpaying by roughly £1.4 billion to £1.7 billion annually due to weak competition.
Goswell acknowledged that larger suppliers offer certain advantages but cautioned about the risks of reduced competition.
"Larger suppliers do bring with them a degree of stability, and stability is not something to dismiss lightly,"he said.
"The concern with fewer suppliers is that the pressure to compete eases off, taking with it some of the incentive to keep prices low and offer something different. The big suppliers have the resources to give people real choice, and the test over the next few years will be whether households who shop around find a genuine range of deals waiting for them rather than three versions of the same thing."
How did the market reach this point?
A wave of new energy start-ups emerged after 2016, led by Octopus Energy, Ovo Energy and Bulb Energy, which initially promised to disrupt the market dominated by legacy suppliers. However, the market began to contract sharply following the 2021/22 energy crisis, when dozens of suppliers collapsed. Bulb Energy became the largest casualty when it entered administration in 2022, after which Octopus Energy rose to become the market leader.
The consolidation accelerated as smaller suppliers struggled to survive volatile wholesale energy costs and regulatory pressures. When including EDF Energy and Scottish Power alongside the big three, approximately 90% of Great Britain's household energy supply market will now be held by only five suppliers.
Chris Norbury, chief executive of E.ON UK, defended the merger by characterizing the market as
"fiercely competitive"and stating that the company's
"flexibility and scale"would enable it to
"deliver for customers now and to transform for the energy system to come"."
What happens next for Ovo customers?
Ovo's 4 million customers will see no immediate changes following the completion of the acquisition. However, E.ON has stated that Ovo will be fully integrated into the group, though the company did not disclose a specific timetable for the integration process or the purchase price of the deal.
Key Facts
- E.ON Next will hold 25% of the household energy market following the acquisition, making it Great Britain's second-largest supplier behind Octopus Energy (26%) and ahead of British Gas (23%).
- The three largest suppliers will now serve nearly three-quarters of all households in Great Britain, with five suppliers controlling approximately 90% of the market.
- The CMA's investigation concluded that E.ON and Ovo were not particularly close competitors and that the merger did not create a realistic prospect of substantially weakening competition.
- The market has consolidated significantly since 2016, when the legacy big six suppliers controlled 85% of the market; dozens of smaller suppliers collapsed during the 2021/22 energy crisis.
- Ovo's 4 million customers will experience no immediate changes, but the company will be fully integrated into E.ON's operations over time.
