Essent and Nuon have reached agreement in principle regarding their intention to merge into a single Dutch energy company.

In a statement to press, the two firms said that the new company formed from their merger will be strategically positioned in the evolving Northwest European energy market and will contribute to the long-term security of supply and sustainability of energy in the Netherlands. The provisional name of the new combination after closing the transaction is EssentNuon NV.

Ludo van Halderen, chairman of Nuon’s management board, commented: This is a good step to take. The energy market is an international one in which you need scale and strength to serve the interests of society. By growing in Europe, we will be able to play a leading part in the sustainability of energy supply and ensure reliability and cost-effectiveness.

The merger requires approval from the shareholders, the formal opinion of the Central Works Councils of Essent and Nuon and approval from the Netherlands Competition Authority (NMa).