Competition watchdog investigates ScottishPower's £2.1 billion deal

In August, Iberdrola, the parent company of ScottishPower, announced its intention to acquire North West Electricity Networks for £2.1 billion. This deal encompasses 88% of the electricity distribution operator, which serves approximately five million customers across north-west England. Following the acquisition, ScottishPower will also operate over 37,000 miles of electricity distribution networks, further enhancing its role as a key energy provider in the UK. On January 29, 2025, Britain's Competition and Markets Authority launched a probe into this significant acquisition, examining potential implications for competition within the electricity sector. The potential merger is notable as it will position ScottishPower as the second largest distribution network operator in the UK, only behind National Grid. Prior to this deal, there were 14 licensed distribution network operators across Great Britain. The CMA's investigation will determine whether the acquisition may diminish competition, which is critical in an industry already facing scrutiny over pricing and service reliability. The regulator has set a deadline of March 27, 2025, to decide if the case will warrant a more in-depth examination. Companies and members of the public are invited to submit comments until February 12, providing a platform for stakeholders to voice their concerns and opinions about the deal’s potential impact on market practices. This investigation underscores the importance of maintaining competitive integrity in vital service sectors. As ScottishPower aims to increase its influence in the UK market through this acquisition, there are broader implications for consumers and competitors alike. The integration of Electricity North West into ScottishPower's operations could lead to a more extensive network for electricity distribution in an area that includes major cities like Manchester and Liverpool. However, this level of concentration raises questions about market fairness and access to energy supplies across the region. The outcome of this inquiry could shape the future dynamics of the energy market in the UK and impact regulatory practices moving forward.