Eon is set to become Britain’s largest provider following reports that it is preparing to buy UK-based Ovo Energy. 

If the deal is completed, Ovo customers will likely be switched over to Eon. It means the German-headquartered firm would leapfrog Octopus Energy, which became the country's largest energy supplier last year, and British Gas. 

Currently, Eon has 16 per cent market share while Ovo has 12 per cent. This would give the combined group a 28 per cent share of the British market, or 9.7 million customers, while Octopus sits at 25 per cent. 

It comes after years of financial pressure on Ovo, which was set up by controversial businessman Stephen Fitzpatrick in 2009 to disrupt the energy market. It bought SSE in 2019. 

A valuation has not been disclosed but previous reports suggested that Ovo could be worth £400million. Some, however, suggest it could be worth a lot less. 

An industry source told The Times that the valuation could be 'low, I think - a distressed sale'. 

But others familiar with the situation denied that the process was distressed.

Ovo's launch in 2009 came at a time when Britain's energy supply was dominated by just a few companies and had no real 'green' alternative. However, it has struggled to compete with the 'Big Six' energy firms amid financial difficulties and controversies. 

In 2022, Mr Fitzpatrick was forced to apologise after Ovo sent customers a list of ten tips for keeping warm over the winter as energy prices were reaching record levels.

Two years later, it booked a net loss of £135million and said there was uncertainty over whether it could meet targets set by Ofgem.

Last year, its chief executive David Buttress stepped down amid hundreds of redundancies to reduce costs. 

Fitzpatrick’s 2019 acquisition of Scottish energy provider SSE helped cement his status as one of Britain’s richest men. He now has an estimated net worth of £3billion. 

He founded the electric flying taxi company Vertical Aerospace in 2016 and owns the private club Kensington Roof Gardens - which also posted a £26million loss in December. 

The deal, which was originally reported by Sky News, is thought to be gathering pace and is on the cusp of completion.

It comes as households brace for a £280 surge in energy bills as the war in Iran drives up the price of oil and gas. 

The energy price cap, set by energy regulator Ofgem, is expected to rise by 18 per cent in July. This will mean the average household will pay £1,929 a year rather than £1,641.    

Both Eon and Ovo declined to comment.