German energy firm E.On has agreed to buy rival Ovo in a deal which would create Britain’s largest supplier.
The combined business will serve about 9.6 million customers, surpassing current top supplier Octopus.
The firms did not disclose the value of the deal, although previous reports indicated that it could be as much as £600 million.
The takeover is subject to regulatory hurdles, including potential scrutiny from the UK’s competition watchdog, and is expected to complete in the second half of 2026.
Stephen Fitzpatrick, founder of Ovo, said: “Energy retail is now more regulated, more capital intensive and increasingly dependent on long-term investment and scale.
“In that context, bringing Ovo together with E.On is the right next step for customers, for colleagues, and for the long-term commitment that decarbonisation requires.”
Ovo has also agreed to sell its home services division, which provides boiler servicing and insurance, to Hometree.
Marc Spieker, chief operating officer commercial at E.On, said: “The United Kingdom is an important growth market for E.On, particularly for flexibility and customer‑focused energy solutions.
“The planned acquisition of Ovo strengthens our retail business and underlines our commitment to be the trusted partner of choice for our customers.
“Energy flexibility and electrification are becoming increasingly important and are critical to the success of the energy transition.
“At E.On, we are passionate about developing solutions that enable customers across Europe to play an active role in making our energy systems both reliable and affordable.”
Chris Norbury, chief executive of E.On UK, said: “Solar, batteries, electric vehicles and a retailer built to orchestrate.
“That is what this deal is about: customers in control and new energy that works for everyone.”