SSE shares fall amid delay to merger with rival energy firm Npower

Michael Searles
SSE shares fell by three per cent on Friday after announcing delay to merger (Source: Getty)

Energy firm SSE have seen their shares fall by three per cent after they announced that their planned merger with rival company Npower has been delayed.

The delay was announced on Thursday night and SSE claimed they would need to renegotiate the terms of the deal due to the introduction of a new energy price cap, which comes into action on January 1.

As a result, SSE's share price fell to £11.85 on Friday.

Both companies are still keen to try and make a deal happen despite the difficulties that they now face, although that will no longer be completed in the first quarter of 2019.

Discussions will take place over the coming weeks around possible changes to the commercial terms as well as the subsequent listing of the new company.

“It is likely that completion of the proposed combination will be delayed beyond Q1 of 2019, but all work to seek to achieve the formation and listing of the new company will continue,” SSE said in a statement.

The price cap aimed at saving consumers around £120 a year for their "typical usage" will be set at £1,137, but it will also mean suppliers have to cut the price of their default tariffs to at least the level of the cap.

SSE are concerned that they will now post considerably lower profits than they had anticipated.

Talks will take place over several weeks with an update on progress in mid-December. SSE will not provide further updates until then.