SSE Agrees U.K. Household Energy Merger with Innogy; 1st Half Profit Falls

SSE PLC (SSE.LN) said Wednesday that it has entered an agreement with Innogy SE (IGY.XE) to merge two of their U.K. retail energy units, as it reported a fall in first-half profit for fiscal 2018.

Under the deal, SSE will spin off its household and services energy business and merge it with Innogy's U.K. retail division, Npower. SSE said that its shareholders will get a 66% stake in the combined business, with Innogy taking a 34% interest. The spinoff will be achieved via a dividend in specie or repayment in capital to SSE shareholders.

London-listed SSE said that the transaction is to be completed by the last quarter of 2018 or the first quarter of 2019, subject to regulatory and shareholder approval.

Separately, SSE reported first-half results for the six months ended Sept. 30, saying that pretax profit fell to 402.2 million pounds ($528.8 million) from GBP675 million the year before after being hit by substantial profit reductions in its wholesale and networks operations. SSE said this was largely due to the phasing of capital expenditure and the resulting impact on regulatory revenue.

SSE declared an interim dividend per share of 28.4 pence, up 3.6% from 27.4 pence the previous year.

The company still expects to report full-year earnings per share at least in-line with a consensus forecasts of 116 pence, based on 18 estimates gathered by the company. It also plans to invest around GBP1.70 billion in its assets during the current financial year.

SSE shares were up 44 pence, or 3.1%, to 1,454 pence at 0807 GMT.

Write to Adam Clark at; @AdamDowJones

(END) Dow Jones Newswires

November 08, 2017 03:25 ET (08:25 GMT)