Along with broadband customers, 1.4 million energy customers will move from Shell to Octopus as part of the deal, growing Octopus’s overall customer base in the UK to almost 6.5 million.
This acquisition is the latest development in a rapid expansion for Octopus, which acquired 1.5 million customers from Bulb after it went out of business.
The deal is subject to regulatory approval but is expected to be completed in the fourth quarter of 2023.
Customers’ credit balances will be protected and automatically transferred to their new Octopus accounts. There will also be no interruption to energy supplies at any time.
Natalie Mathie, energy expert at Uswitch.com, said: “We’ve known that Shell Energy has been planning to exit the UK retail energy market for a while, so it will be good for customers to have more certainty about what might happen next.
“Until any takeover is done and dusted, the business will operate as normal. Customers can be reassured that whatever happens, their credit balances will be protected and no action is required from them.
“Shell Energy's decision to exit the market is disappointing, as it has been a well-backed challenger to the larger energy suppliers.
“It is important that there is strong competition between firms in the longer term, so suppliers cannot rest on their laurels when it comes to service quality and price.”