CONCERNS over future job losses have been raised over a "shameful" merger plan involving SSE, one of Scotland's largest companies.

The move will see the Perth-based group agree to merge its household supply business with Npower to form a new energy company.

It comes as SSE lost 410,000 retail customers since last year while adjusted pre-tax profits fell by 13.9 per cent in the six months to September.

The news comes less than a month after the government published draft legislation to cap energy prices.

Analysis: Union of two of ‘Big Six’ power firms raises questions for consumers

The Perth-based group, which is Britain's second biggest energy supplier, says it has been looking at the retail merger plans for "well over a year" and its chief operating officer and co-head of retail Tony Keeling, denied it was the reason for the merger.

Peter Terium, Innogy’s boss, however, said that the Government’s controversial price cap plans “speeded up” talks with SSE.

The Herald:

Unite national officer for energy Kevin Coyne said the way SSE had gone about the merger process was "shameful" and cared more about shareholders than the workforce and consumers.

The deal will see SSE and Npower's parent company, Germany's Innogy, merge their household energy supply and services business in Britain, turning the Big Six energy suppliers into five.

The merger of the two Big Six firms would served 11.5 million customers, would become Britain’s largest electricity supplier, and second only to British Gas as the country’s largest household gas supplier.

The union Unite is seeking an urgent meeting with SSE executives to seek future job reassurances for the 21,000-strong workforce.

Analysis: Union of two of ‘Big Six’ power firms raises questions for consumers

The largest union at SSE said it wants a "wide-ranging campaign" to reverse the proposal which, it said, "as not in the interests of the consumer as winter fuel bills were set to soar, or the employees".

It said the merger is "for the sole benefit of shareholders", with "scant concern" for the workforce and the consumer.

Mr Coyne added: “We would urge the Competitions and Markets Authority (CMA) to take a critical look at this merger as the ‘big six’ energy companies, with an estimated 80 per cent market share, would become the ‘big five’. Their stranglehold on the energy market will increase."

The Herald:

He said the fact that the management of SSE, formerly known as Scottish and Southern Energy told its workforce the news by podcast was "an insult".

He added: "We fear that job losses could be on the cards to feed insatiable shareholder hunger."

The SSE said it was too early to talk about job losses saying: "The new organisation has to appoint a chairperson and executive team so we don’t have job figures at the moment as the new organisation will have to take a view on what it needs."

The new SSE will continue to operate from Perth and concentrate on energy generation including wind farms, hydro schemes and coal stations, the electricity infrastructure including pylons and poles and its business to business division which deals with everything from contracting to rail and energy management.

Analysis: Union of two of ‘Big Six’ power firms raises questions for consumers

The new company will be listed on the London Stock Exchange with SSE shareholders holding 65.6% and Innogy 34.4%.

Shareholders in SSE will vote on the deal by July next year, while Innogy has committed to seek the approval of its supervisory board by the end of 2017.

SSE said the move, which which it is hoped will be completed by the end of 2018 or early 2019, should create “significant” savings in capital expenditure and cost efficiencies.

The Herald:

Mr Keeling said: "We are doing it because we believe the two companies coming together offer the opportunity to be more efficient, more innovative and more agile.

"Over the next 12 months the CMA will have a look at the merger and hopefully reach a decision to allow us to go forward. Once the CMA clear, we will then list the company and get on with the hard work of merging the two organisations together so we get the value for our customers in terms of a more efficient business, a more agile business and a more innovative business."

Alistair Phillips-Davies, chief executive of SSE, cited the “scale of change in the energy market” as he explained the rationale for the deal, saying it would “enable both entities to focus more acutely on pursuing their own dedicated strategies, and will ultimately better serve customers, employees and other stakeholders”.

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"Energy bills need to be as low as possible and government has called on us to be more efficient," he said. "The move will help us reduce costs and drive greater competition and benefits for customers. And with a specialist focus it will be able to have an even greater focus on its customers."

Alex Neill, from consumer group Which?, urged the CMA to have “a hard look” to avoid customers being left worse off.

“Mergers of such big players in essential markets such as energy are rarely a good thing for consumers, especially given the low levels of competition,” he said.

Analysis: Union of two of ‘Big Six’ power firms raises questions for consumers

Centrica (Scottish Gas), Iberdrola (ScottishPower), E.On and EDF Energy make up the remainder of the Big Six.

All have also come under recent pressure from smaller rivals who have been taking customers and market share.