U.K. retail supplier OVO Energy has agreed to acquire SSE’s household energy supply and related services business (SSE Energy Services) in the U.K. for £500 million, comprising £400 million in cash and £100 million in loan notes

The acquisition of SSE's retail business includes customers, operations and employees for energy, telecoms and home services.

Together, the companies serve almost 5 million households across the U.K., which would make OVO the U.K's second largest retail supplier after the transaction (second to Centrica's British Gas with 7 million households)

SSE Energy Services serves 3.5 million household customers in Great Britain

OVO currently serves 1.5 million customers. In the last year, OVO has increased its U.K. customer base by 50% and has opened operations in France and Spain. OVO has plans to open in Australia, Germany and Italy next year.

"The acquisition will accelerate OVO’s ambition to provide clean, affordable energy for everyone. Combining SSE’s scale and OVO’s technology capabilities will enable millions more customers to experience the latest technology to decarbonise their homes, while keeping their costs down and continuing to receive great service," OVO said

OVO has negotiated rights to use the SSE master brand under licence for a transitional period, and acquired regional brands as part of this transaction and intends to maintain them for the immediate future.

As previously reported, earlier this year, OVO secured a significant strategic investment from Mitsubishi Corporation, which has allowed OVO to invest even further in the technology required to help transition to a zero-carbon future. For example, OVO has launched the world’s first domestic vehicle-to-grid charger, it is developing the software required to integrate millions of electric vehicles onto the grid, and it is investing in dynamic battery storage to allow homes to sell energy back to the grid.

OVO's acquisition of SSE Energy Services is subject to regulatory approvals which the company expects will take a number of months. For the time being, both companies will continue to operate independently as separate entities and serve their respective customers.