SSE pulls retail unit merger with Npower

(Sharecast News) - British energy supplier SSE on Monday pulled out of its planned merger with Innogy's Npower retail unit, saying the two companies could not agree on commercial terms and "challenging" market conditions.SSE said other options for SSE Energy Services should now be considered, "including a standalone demerger and listing, a sale or an alternative transaction"."The transaction has been impacted by multiple factors including the performance of the respective businesses, clarity on the final level of the default tariff cap, changing energy market conditions and the associated implications of these for both the joint business plan and the market in which the business would be operating," SSE said."These implications meant the new company would have faced very challenging market conditions, particularly during the period when it would have incurred the bulk of the integration costs."SSE chief executive Alistair Phillips-Davies said pulling the deal "was not an easy decision to make"."This was a complex transaction with many moving parts. We closely monitored the impact of all developments and continually reviewed whether this remained the right deal to do for our customers, our employees and our shareholders. Ultimately, we have now concluded that it is not."The company added that SSE Energy Services was expected to be profitable and cash flow positive in 2018/19 and 2019/20 and continued to deliver strong performance for customers, across a wide range of measures.In November, the companies said they were renegotiating terms, blaming the introduction of an energy price cap.The merger, which was been cleared by the UK regulator, would have created the UK's second-biggest energy company.An energy bill price cap of £1,137 a year for "typical usage" is due to come into force in the new year.