Innogy, SSE enter binding agreement on UK retail merger

FRANKFURT, Nov 8 (Reuters) - Innogy, Germany's largest energy group by market value, said on Wednesday it had entered a binding agreement with British peer SSE (LSE: SSE.L - news) to combine their British retail activities.

The companies had said a day earlier that they were in talks about such a step, which would create a challenger to British Gas as the country's largest power supplier.

SSE will hold 65.6 percent of the new entity, which will be listed on the London stock exchange (Other OTC: LDNXF - news) , while Innogy will hold the remaining 34.4 percent, Innogy said in a statement.

Innogy will receive a break fee of 60 million pounds ($78.93 million) if SSE does not obtain shareholder approval for the move by July 31, 2018, it said.

($1 = 0.7602 pounds) (Reporting by Christoph Steitz; Editing by Maria Sheahan)