UK Energy and Broadband Supplier First Utility Acquired by Shell

Shareholders of UK energy and broadband supplier First Utility have agreed to sell the business to Anglo-Dutch oil company Shell Petroleum Company Ltd (Shell), which subject to regulatory and other approvals is expected to complete in early 2018.

The provider is a fairly recent entrant into the United Kingdom’s fixed line broadband and phone market, which largely stems from a desire to beat rivals like SSE and improve customer retention. At this point it’s unclear whether the deal with Shell will have any impact on their internet access division, although Shell does plan to more generally accelerate growth and develop new customer propositions.

Darren Braham, First Utility Co-founder and CFO, said:

“Shell has been our strategic trading partner for a number of years and we are excited about the extra value and propositions we can deliver to customers as a result of this sale. First Utility has brought significant disruption and competition to the energy market and this move will help us to capitalise on all the opportunities provided by digitalisation, decarbonisation and the move to battery technology and electric vehicles.

Shell is the ideal business to acquire us. They have an excellent understanding of the business and our people and share our enthusiasm for the opportunities to help customers take even greater control of their household services.”

Estimates suggest that the deal is worth around £200m to £300m and First Utility is currently home to well over 800,000 customers, although most of those are energy only subscribers.