Co-op Energy is in talks with Octopus, a rival challenger in the energy sector, over a possible merger, according to a report in the Sunday Times.
The newspaper says Octopus is looking to to acquire some or all of Co-op Energy’s 370,000 customers to add to its own 800,000 client base, taking it past the 1m mark.
Losses at Co-op Energy impacted the most recent annual results for its owner Midcounties Co-operative, released in May. The energy business had grown its sales to £423m but was hit by rising wholesale costs, leaving Midcounties considering options to reduce its impact.
The society appointed auditor PwC to explore options for two GB Energy and Flow, two brands which had been acquired by Co-op Energy. It took on the 160,000 customers of GB Energy Supply when it collapsed in 2016 and bought Flow, with about 130,000 customers, in 2018.
According to the Sunday Times, sources said there had been problems merging the IT systems of the different businesses, and Co-op Energy has struggled with customer service issues.
Octopus – which, like Co-op Energy, supplies its energy from renewable sources – entered the market in 2016 and says it has been growing by around 30,000 customers a month. It now supplies more than 400,000 UK homes.
It bought rival Affect Energy in September last year, and took on customers from Iresa after it collapsed in December.
Co-op Energy and Octopus have both declined to comment on the reports.
