Energy supplier SSE says it has been in talks with the owner of rival Npower with a view to forming a new UK energy business.
It said had been in discussions with Germany’s Innogy about merging their UK gas and electricity supply businesses into an independent UK company.
A merger would bring together two of the UK’s “big six” gas and electricity suppliers.
SSE, the UK’s second-largest supplier, said the talks were “well-advanced”.
Any deal would need approval from competition authorities and shareholders.
In a statement, SSE said: “In discussions, SSE is mindful of the requirements of customers and the concerns of employees. It will disclose the outcome of the discussions as soon as they are concluded.”
Innogy confirmed the two were in “advanced exclusive discussions”.
SSE, formerly known as Scottish and Southern Energy, supplies energy to 7.77 million households while Npower serves 4.8 million.
The other four major suppliers are British Gas, Scottish Power – which is owned by Spain’s Iberdrola, E.On and EDF.
SSE shares rose more than 2% on news of the merger talks.
Source: BBC News