Octopus Energy Plans £10bn Demerger of Tech Arm Kraken

Octopus Energy Group, Britain's largest residential gas and electricity supplier, is planning a £10bn demerger of its technology arm to solidify its position as one of the UK's most valuable private companies.

Octopus Energy is in talks to separate Kraken Technologies from the rest of the group with the help of investment bankers. The demerger is expected to happen within the next year, with existing investors receiving shares in the independent Kraken business.

External shareholders may also acquire up to a 20% stake in Kraken to validate its valuation, which could reach $14bn (£10.25bn) according to sources.

Major investment banks like Citi, Goldman Sachs, JP Morgan, and Morgan Stanley have been approached to pitch for the demerger mandate.

The move will boost Octopus Energy CEO Greg Jackson's wealth and highlight the company's growth, now serving 7.5 million customers in the UK after acquiring Bulb and Shell's home energy business.

With a 24% market share, Octopus Energy has become the largest supplier in the UK, surpassing British Gas. It also has 2.5 million customers globally.

Kraken, an operating system licensed to energy providers and other companies, connects various parts of the energy system and enables the use of renewable energy more efficiently.

Its recent deal with National Grid in the US will serve 6.5m customers, with more licensing agreements expected in the US and globally.

Speculation about a public listing of Kraken may arise post-demerger, as the business expands in the US market. The demerger aims to eliminate conflicts of interest and attract more customers to the technology platform.

According to the source: Sky News.