TalkTalk has struck a deal to buy Ovo Energy’s phone and broadband business, adding around 100,000 customers to its subscriber base.
Ovo acquired SSE Phone and Broadband through its £500 million takeover of SSE Energy Services in January 2020, but has been eager to divest the telecoms division in order to focus on its core utilities business.
Discussions with TalkTalk were initiated in May and now the two sides say they are in the final stages of agreeing the sale of SSE Phone and Broadband and expect the transaction to go through in the Autumn.
Ovo has granted TalkTalk a licence to use the SSE branding until April to facilitate a smooth transition, but no financial details have been disclosed.
“The sale is part of Ovo’s strategy to focus on the decarbonisation of the home and its ambitions through Plan Zero to become a net zero business,” explained Ovo. “This provides the best result for SSE Phone & Broadband customers and the team due to TalkTalk’s expertise and focus in the area.
“Employees have been informed of the changes and consultations will continue with trade unions and employee representatives.”
TalkTalk itself has been the subject of takeover speculation over the past few years as the telecoms industry consolidates. Although the company has few infrastructure assets, its subscriber base of 4.2 million customers represents a significant opportunity for other providers to expand their footprint and cross-sell services such as mobile and television.
Sky and Vodafone have been linked with a bid, while Virgin Media O2 reportedly made a £3 billion opening offer earlier this year. (opens in new tab)