Shell Divests Germany, UK Home Energy Units

Octopus Energy Ltd. has signed a deal to acquire the household gas and power units of Shell PLC in the United Kingdom and Germany, the UK companies said.

The agreement between Octopus and Impello Ltd., a subsidiary of Shell Petroleum Co. Ltd., to buy Shell Energy Retail Ltd. in the two countries follows Shell PLC's announcement June 6 it intended to exit its home energy businesses in Germany, the Netherlands and the UK.

The move separately announced Friday by Octopus and Shell Petroleum transfers 1.4 million household energy customers and 500,000 broadband customers to the new owner, according to an Octopus press release.

Neither disclosed the value of the transaction.

"This deal grows challenger energy supplier Octopus to nearly 6.5 million household customers in the UK (over 11 million meter points)", Octopus said. "Its [Octopus] customer base in Germany will grow to almost 300,000".

Subject to regulatory approval, the deal is expected to close in the fourth quarter, the two companies said, assuring customers of a smooth transition.

No disruption in energy supply will come as a result of new ownership, Octopus said, adding, "Customer credit balances are protected, and will automatically get transferred to their new account with Octopus together with their existing direct debits".

"Tariffs and offers will remain unchanged for all existing home energy customers, including continued access to 100 percent renewable power", Shell Petroleum said in its own announcement.

"Octopus has a strong track record in large-scale customer migrations through its proprietary tech platform Kraken", said London-based Octopus, which conducts business across the energy value chain. "The company recently completed the transfer of 1.5 million Bulb customers in just six months – an industry record – all while maintaining its award-winning customer service levels and its Which? Recommended Energy Supplier status for the 6th year running".

The purchase of Shell Energy comes six months after Octopus concluded the acquisition of Bulb Energy Ltd., as announced by Octopus December 21, 2022.

Bulb's absorption into Octopus had been approved by the UK government to save the 1.5 million customers of the bankrupt supplier, according to a media release on the government website October 29, 2022.

Octopus chief executive and founder Greg Jackson said in a statement about the purchase of Shell Energy, "Following a stringent process, we are pleased to be acquiring Shell Energy Retail in the UK and Germany".

"Octopus has proven that it delivers game-changing service whilst innovating and investing relentlessly towards a cheaper cleaner energy system", Jackson added.

Shell Energy executive vice-president Steve Hill said in a statement, “To drive performance, discipline and simplification, we are prioritizing countries, projects, and routes to market where we can deliver the most value. We will work closely with Octopus to ensure a seamless transition and continued high standards of customer service”.

Shell PLC announced June 6 it had decided on the divestment after a "strategic review" but that it was keeping its wholesale energy business, as well as its retail home energy business outside Europe. "Neither our B2B [business to business] wholesale and SME [small and medium enterprises] customer supply businesses under the Shell Energy brand, or our home energy retail businesses outside Europe, are in scope of this potential divestment", it said.

Shell Petroleum and Octopus have also agreed to explore a potential global partnership. The planned collaboration involves electric vehicle (EV) charging, as well as "possible joint promotions and brand activations, alongside co-operation on out-of-home charging and other activities across the EV value chain", Shell Petroleum's news release said. "Shell is already a leading EV charging provider with a global charging network set to expand to around 200,000 public charging points by 2030".

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