The deal to merge Npower and SSE’s retail operations has been given the all-clear by the competition watchdog, paving the way for the tie-up of two of Britain’s biggest energy suppliers.
The Competition and Markets Authority (CMA) said its decision to give final clearance to the Big Six deal comes after its investigation concluded households will still have "plenty of choice" on standard variable tariffs (SVTs).
It found the two providers are "not close rivals" on the tariffs - the most expensive deals which had been an area of particular concern for the regulator.
SSE is Britain’s second biggest energy supplier and the merged group will serve around 11.5 million customers.
Anne Lambert, chair of the CMA inquiry group, said: “With many energy companies out there, people switching away from expensive standard variable tariffs will still have plenty of choice when they shop around after this merger."
Ms Lambert added: "But we know that the energy market still isn’t working well for many people who don’t switch, so we looked carefully at how the merger would affect SVT prices.
"Following a thorough investigation and consultation, we are confident that SSE and Npower are not close rivals for these customers and so the deal will not change how they set SVT prices."
SSE welcomed the CMA’s decision to give the merger the thumbs up, which will create the country’s second biggest energy supplier after British Gas.
Alistair Phillips-Davies, chief executive of SSE, said: "This is a complex transaction and there is still much work to do in the coming weeks and months.
The CMA had launched a full inquiry into the merger in May after its initial probe found the tie-up could reduce competition, potentially leading to higher prices for households.
It had already provisionally cleared the deal in August.
The regulator’s fears were eased by high levels of customer switching - the highest in a decade - while it also found the proportion on SVTs has fallen.
But it was the impact on those people who do not switch and are stuck on the so-called rip-off SVTs that most worried the CMA.
After looking into the effect on these households, it found if SVT customers switch, they would generally change to a cheaper fixed tariff.
The CMA added the incoming government-enforced price cap will also help protect customers on variable deals.
RWE-owned Npower and SSE announced in November their British household energy supply and services businesses would join forces, reducing the Big Six energy suppliers to five.
Under the proposed deal, the new company will be listed on the London Stock Exchange with SSE shareholders holding 65.6% and Npower owner Innogy holding 34.4%.
Centrica-owned British Gas, Iberdrola (Scottish Power), E.On and EDF make up the remainder of the Big Six.