Utility Week

20 | 7TH - 13TH JUNE 2019 | UTILITY WEEK Finance & Investment Analysis T he confidence in the air was almost palpable in April 2018 when SSE and Innogy made the bold move to name Katie Bickerstaffe as the chief executive of a company yet to be formed. Back then the proposed merger between SSE's retail arm, SSE Energy Services, and Innogy's UK supplier, Npower, hadn't even been given the go-ahead by the Competition and Markets Authority (CMA). The deal was expected to transform the big six into the big five and would have cre- ated the UK's second-largest energy sup- plier a‰er British Gas. The new company would have been owned up to 65.58 per cent by SSE shareholders, while Innogy was going to hold 34.42 per cent of the shares on completion. Unsurprisingly, the proposed merger was subject to an investigation to deter- mine whether it would be detrimental to competition and, ultimately, customers. So, it felt a tad premature when the companies announced the first appointment to the new entity's board before such a hurdle had been cleared. But cleared it was – provisionally by the inquiry group of independent CMA panel members at the end of August, then receiv- ing final clearance in October. With the wheels in motion and further appointments to the senior team for the new retailer – including Gordon Boyd as designate chief financial officer and Dr Mar- tin Read as designate chair – it seemed that nothing could stop the touted transaction from moving forward. However, the merger came grinding to a halt before the year was up due to "adverse developments" in the retail market and "reg- ulatory interventions" such as the price cap, according to the companies. Warning signs came when SSE and Innogy entered into negotiations in Novem- ber 2018 to adjust the terms of their planned tie-up – a year a‰er the deal was first announced. A‰er failing to reach an agreement, the two parties decided to call the whole thing off in December. With the prospect of a new energy retailer now seemingly a distant memory, SSE and Innogy were in effect le‰ in limbo as to what to do with their respective retail arms in Britain. And naturally, speculation started to mount about what would become of the des- ignated senior team for the company that on paper appeared to have such promise but was ultimately never to be. An official name for "Merge Co" was never publicly revealed, but its mission was. It was expected to "create a new market model", deliver greater operating efficiencies and provide better customer service. No stranger to the top job, Bickerstaffe gave up her role as chief executive of the UK and Ireland division of multinational electri- cal and telecommunications retailer Dixons Carphone, a position she had held since 2015, to take the helm of the mooted retailer. It was this customer-facing experience gained at corporations such as Dyson, PepsiCo and Unilever, that formed part of SSE and Innogy's rationale for hiring her. SSE praised Bickerstaffe for her "invaluable understanding of customers' needs". While revealed as CEO designate in April 2018, Bickerstaffe didn't assume the role until 24 September. Change of tack at SSE Following the failed merger of Npower and its retail arm, SSE has tasked Katie Bickerstaffe, CEO of the mooted new company, with steering the division towards a listing or sale. Katey Pigden reports. Bickerstaffe will form a separate board 'to create a more independent, sustainable business' "The steps being taken to increase the independence and autonomy of the business will, in the short term, enable it to strengthen its focus on customers, respond with greater agility in a fast-moving market, and deliver the progress that will underpin a future outside the SSE group" KATIE BICKERSTAFFE, EXECUTIVE CHAIR, SSE ENERGY SERVICES

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