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Shell has agreed to sell its retail home energy businesses in the UK and Germany to Octopus Energy Group, the UK-based supermajor said on Friday.
Shell will be selling Shell Energy Retail Limited (SERL) in the UK and Shell Energy Retail GmbH (SERG) in Germany, under a broader agreement with Octopus Energy to explore a potential international partnership in EV charging.
The sale has an effective date of September 1, 2023, and is expected to complete in the fourth quarter of 2023, subject to regulatory approval.
Financial details were not disclosed, but sources told Reuters earlier this year that Shell Energy could be valued at between $50 million and $100 million.
The businesses Shell is selling provide domestic gas, power, and broadband services to around two million customers and operate under the Shell Energy brand.
“This agreement follows the announcement during our Capital Markets Day to divest our home energy retail business in Europe,” said Steve Hill, Executive Vice-President, Shell Energy.
“To drive performance, discipline and simplification, we are prioritising countries, projects, and routes to market where we can deliver the most value.”
Earlier this year, Shell said it intended to exit the home energy business in Europe, amid poor returns and a review of its retail operations. Octopus Energy, Ovo, and British Gas were reportedly interested in buying Shell's UK retail business.
Today, Shell said it is winding down its home energy retail business in the Netherlands and is in the process of transitioning those customers.
Earlier this year, Shell was criticized by institutional investors in Europe for its new strategy to continue investing in oil and gas production and selectively pour capital into renewable energy solutions, to the point of some investors considering removing it from their portfolios.
“It is critical that the world avoids dismantling the current energy system faster than we are able to build the clean energy system of the future. Oil and gas WILL continue to play a crucial role in the energy system for a long time to come with demand reducing only gradually over time,” Shell’s chief executive Wael Sawan said on Shell’s Capital Markets Day in June.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.