Eon given the green light to buy Ovo - what does it mean for customers?

German energy provider Eon has been given the green light to buy UK firm Ovo and create one of the country's largest energy suppliers. The competition regulator today waved through Eon's bid in the latest sign of consolidation in the energy sector as the number of main suppliers falls to five. Eon has about 5.6million customers in the UK. Once it acquires Ovo, the combined group's customer base is expected to be around 9.6million, potentially making it the largest energy provider in the UK. Earlier this year, Eon boss Chris Norbury said greater scale would allow the combined group to improve the range of products and help bring energy bills down. The Competition and Markets Authority (CMA) today said that the deal would not reduce competition in the market. But when energy bills are forecast to soar, and the number of suppliers is falling, should customers be worried? German energy provider Eon has been given the green light to buy UK-based OvoWhy is Eon buying Ovo?In May, Eon announced plans to buy Ovo for around £600million to create one of Britain's biggest suppliers but faced scrutiny over competition concerns. The CMA today said it had cleared the acquisition and would not refer it for an in-depth investigation. The deal, expected to complete by the end of this year, comes as Eon and other firms try to build scale to help them cope with slimmer margins and fend off competition from Octopus Energy, which last year overtook British Gas as the sector's largest energy supplier.In August, the boss of Eon refused to rule out job cuts as part of its deal with Ovo, as it eyed potential cost savings from the deal. Norbury said the combination with the UK challenger business would bring economies of scale, which could include technology savings and removing duplicate roles across the combined company.Norbury said in August: 'I'm not going to be disingenuous with colleagues, with the trade unions that we have a very close, very good working relationship with — there is a synergies case there.'Ovo has endured a tumultuous history since being founded by entrepreneur Stephen Fitzpatrick in 2009. Last year, Ovo's pre-tax losses widened to £71million, from £61million in 2024, according to accounts filed via Companies House. Regulators now require energy firms to hold much larger cash reserves. For Ovo, joining forces with a giant like Eon provides the financial backing needed to remain stable. What does the deal mean for consumers?Nothing changes for now. On its website, Ovo said: 'Right now nothing changes. You don't need to do anything. Your energy supply, your tariff, your balances and the way you interact with us all stay the same. The same teams will continue to support you, just as they do today.'We'll let you know well in advance if anything is going to change.'It added: 'The deal is not yet complete and, for now, OVO and E.ON will continue to operate as separate businesses and everything stays as it is today.' Eon previously said that existing tariffs would be honoured in full and that service would continue unchanged. Today it said: 'E.ON will now move to close the transaction. Until completion, E.ON and OVO continue to operate as fully independent businesses and there is no change for customers of either company.' Tom Goswell, energy supply lead at Cornwall Insight, said in May: 'Larger suppliers can bring stability, resilience, and the ability to invest in the products and services that will matter as households move towards heat pumps, EVs, and flexible tariffs.'However, as the market becomes more concentrated, it will be important to consider what this means for consumer choice. The conversation for policymakers is making sure that consolidation and competition aren't mutually exclusive, because households will need both stability and choice as the market evolves.'Should customers switch deals? When comparing energy tariffs, it is a good idea to look at the unit cost of energy and then your actual energy usage to get a better idea of how much the fix will cost you. Richard Neudegg, director of regulation at Uswitch.com, said: 'There is no change today as a result of this for customers of either supplier, and it remains to be seen how E.ON approaches any integration of the OVO brand. Whatever happens, any tariffs customers are on with either brand, and any credit on their account, will be honoured.'OVO customers, like customers of any energy supplier, can still switch if they want to. That's particularly important right now for anyone on a standard variable tariff, with the price cap having risen 4 per cent today and one forecast yesterday predicting a further 16 per cent rise for those on the cap in January.'Fixed deals are currently available well below the predicted January cap, so it's worth comparing to see if you could lock in a better rate.'According to Uswitch.com, Fuse Energy's 18-month fixed rate tariff is the cheapest tariff currently available, at £1,612, £111 below the price cap. Energy bills expected to rise sharply next year Millions of households face the highest energy charges in three years this winter from today after months of rising market prices pushed up the government's price cap for the second time in three months.Gas and electricity prices have been increased by 4 per cent from today under the new energy price cap, after rising 13 per cent at the start of July to take account of global energy market price rises caused by the war in the Middle East.The energy price cap from today takes an annual bill to £1,723 for the typical household using both electricity and gas and paying by direct debit if this level was sustained for a year. And even higher energy bills are on the way. Energy prices are set to increase significantly in January, with a typical annual bill forecast to jump by £276. According to Cornwall Insight, the quarterly domestic energy price cap is forecast to rise by about 16 per cent in January, as the war in the Middle East continues to keep wholesale energy prices high.The energy price cap affects people with standard variable energy tariffs. Fixed rate tariffs can be cheaper. The forecast comes despite Labour removing a 5 per cent tax on domestic electricity prices from October. Cornwall Insight said: 'This substantial ⁠increase is largely driven by the escalating conflict in the Middle ​East, which continues to disrupt gas supplies to the UK and ​the rest of the world.'Cornwall Insight said it expected Ofgem's price cap to rise in January 2027 to £1,999 a ⁠year for typical use, up £276 from £1,723 in October 2026, which would be the highest level since March 2023.Wholesale energy prices are the largest single factor contributing to British energy regulator Ofgem's domestic price cap, which is set on a quarterly ⁠basis using a formula that also reflects suppliers' network costs and environmental and social levies.Ofgem sets the wholesale part of the cap using prices from a fixed ⁠period known as the observation window, which means the forecast for the cap level from January could change.'With that window for the January ⁠cap ​now nearly halfway through, the price rises ​seen in September are already locked in, making a January increase all but certain', Cornwall Insight said. Simone Rossi, the chief executive of EDF, has warned the UK is 'walking into a second energy crisis' and called for an extension to the VAT cut on electricity which kicked in today.