The new energy giant will include eight million household accounts supplied by SSE as well as the household and business customers of Npower, creating a supplier with around 11.5 million customer accounts across the country.
German energy group E.ON (EONGn.DE) said operating profit at its retail business fell by more than a third in the first nine months, singling out difficulties in Britain, where key peers announced plans to merge their struggling customer units.
A merger would bring together two of the UK's "big six" gas and electricity suppliers.More news: TSA screenings fail to spot weapons most of the time, agency says
SSE on Wednesday said that the deal will lead to the creation of a new, independent company which will be owned by shareholders of SSE, with minority participation by Innogy.
Any deal would need approval from competition authorities and shareholders. As of July this year SSE had around 7.7 million customers which, if combined with the 5.1 million now signed up to innogy's GB-facing brand, would see the entity rival British Gas for customer numbers. "It will disclose the outcome of the discussions as soon as they are concluded". The shares are up 1.4% over the last two days, while shares in Innogy have risen 2.3%.