Edit: I notice that I failed to spot that the thread had moved on to a second page and I was saying more-or-less the same things as others had said in that second page before I posted this. More trouble than it's worth for me to try to sort out what I'd added, though, so I'll leave it as it stands...
dspp wrote:I don't see this as being SSE exiting domestic market at all. It looks to me as if SSE are doing an acquisition (disguised as a JV) to bulk up their retail arm, i.e. a double-down decision. I have seen nothing to suggest that there is not a buy-out clause of the innogy (npower) part at some later date, and such a clause would be normal.
The key wording is:
The Board of SSE plc ('SSE') today announces that it has entered into an agreement with innogy SE ("Innogy") in respect of a proposed demerger of SSE's household energy and services business in Great Britain ('SSE Retail') and combination with innogy's subsidiary npower Group plc ('npower') to form a new independent UK incorporated company to be held by SSE shareholders (following the demerger) and with minority participation by innogy ('Combined Retail Company').
The only way it could be construed as an exit for SSE was if SSE were already planning to spin out the combined unit at some future point. I've seen nothing to suggest they intend this.
I think you're quite right that that's the key wording, but you're missing some of the key words it contains! Specifically, it's described as a "demerger", the new company is described as "independent", and it's described as to be held by "SSE shareholders", not by "SSE". It's basically describing a complex deal in which SSE and innogy get together to combine their "SSE Retail" and "npower" businesses to form a new company
and they distribute that new company's shares to their shareholders. Once they've done that, SSE's and innogy's shareholders haven't exited the businesses (though they should be able to do so easily if they want, by selling the shares distributed to them), but SSE and innogy themselves have...
In short, those words imply that they are planning to spin out the combined unit as basically part of the same deal. It probably won't all happen absolutely simultaneously, as there will probably be things that need to be done in the right sequence, but I'd expect nothing to actually happen until it's all been approved, and then everything to be done in a matter of a few hours or days, just long enough to get all the formalities done in the right order.
Incidentally, my personal view is that this is basically political defensive manoeuvring, aimed mainly at ensuring that if the politicians make the consumer-facing parts of their businesses unviable economically, it will be as clearly visible as possible as the new company making losses due to the government's actions, and the rest of their businesses will have as clear a case as possible for
not cross-subsidising those losses or being nationalised along with them.
Gengulphus