Octopus Energy Group has sealed a deal to take on its collapsed rival Bulb Energy.
Octopus said it would take on the company’s 1.5 million customers, “bringing an end to taxpayer losses and uncertainty for Bulb customers and its 650 employees”.
Bulb Energy has been run with billions of pounds of government support for nearly a year and Octopus is paying the government to take on its customer base.
Octopus said: “It is believed this will represent a higher amount per customer than suppliers typically paid to take on any of the 29 suppliers who have failed since September 2021.
“Taxpayers will also benefit from a profit-share agreement for a period of up to four years.”
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The Department for Business, Energy and Industrial Strategy (BEIS) confirmed an agreement had been reached between Octopus and the special administrators of Bulb.
It said the sale would be completed after a statutory process called an energy transfer scheme, which will move Bulb’s relevant assets into a new separate entity to “protect consumers during the transfer process”.
This is subject to approval by the business and energy secretary, Grant Shapps, and will take effect at a time ordered by the high court, expected to be by the end of November.
The move comes after an almost year-long process run by Bulb’s administrators to find the best solution for the company, its employees and taxpayers.
Octopus is headquartered in the UK and operates in 14 countries, with significant businesses in energy retail, generation, technology and electric vehicles.
It has received more than $1bn in investment from global firms, including investment funds and large energy companies.
There is no change to either Bulb or Octopus customers’ supply arrangements, and Bulb customers have been told their credit balances will automatically get transferred to their new account with Octopus, along with their existing direct debits.
Bulb, the seventh largest energy supplier in the UK, was one of the newcomers in energy retail. Launched in 2015, its aim was to provide fair and transparent pricing and use tech to help customers manage and reduce their energy usage.
The company grew to more than 1.5 million customers due to the team’s focus on growth and smart, green products.
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Shapps said the sale “will bring vital reassurance and energy security to consumers across the country at a time when they need it most. This is a fresh start and means Bulb’s 1.5 million customers can rest easy, knowing they have a new energy home in Octopus.”
Greg Jackson, the founder and chief executive of Octopus Energy Group, said: “We take our responsibilities very seriously. We will work unbelievably hard to deliver value for taxpayers and to look after Bulb’s staff and customers.
“We started off as rivals but shared the same mission – driving a greener, cheaper energy system with people at the heart. We know how important this is to Bulb’s loyal customers and dedicated staff, and are determined that Octopus can provide them with a stable home for the future.”
Matthew Cowlishaw, the senior managing director at Teneo and special administrator to Bulb Energy, said: “We are pleased that we have achieved the objectives of the special administration, especially against the backdrop of wider energy market disruption.”
The shadow energy minister, Alan Whitehead, said: “This is a further reminder of this Conservative government’s abject failure when it comes to regulation of energy. And the British people are once again paying the price.
“The government needs to come clean about how much the collapse of Bulb has cost people in higher bills, what this sale will add to that tally, and how they have concluded that this deal represents value for taxpayers’ money.”