Scottish Power, the Spanish-owned energy supplier, and larger rival Ovo Energy have begun holding exploratory talks about a merger that would create a company serving more than six million British households.

Sky News has learnt that executives from Iberdrola, which owns Scottish Power, and Ovo have been engaged in preliminary discussions in recent weeks about the possibility of a deal.

The talks are at an early stage and any formal transaction would be months away, if it materialised at all.

If the two companies do agree a merger of their residential gas and electricity operations, it would create the third-largest supplier behind Centrica-owned British Gas and Octopus Energy.

As the larger company, with 4 million customers, Ovo would probably be the acquiring entity, but with Iberdrola potentially contributing cash and remaining as a shareholder in the enlarged group, according to one banking source.

Scottish Power serves about 2.4 million households.

The discussions between the two companies are running in parallel to a separate process through which Ovo is exploring the potential to raise roughly £300m from the sale of new shares in the company, according to industry sources.

In recent weeks, a number of financial investors have been contacted by Rothschild, the investment bank advising Ovo, about the opportunity.

Exactly a year ago, Sky News revealed that Ovo had hired Rothschild to explore options, including bringing in a new investor or a sale, 15 years after it launched in a bid to challenge the industry’s oligopoly.

Founded by Stephen Fitzpatrick, the entrepreneur who now owns London’s Kensington Roof Gardens, Ovo’s shareholders include the private equity firm Mayfair Equity Partners, Morgan Stanley Investment Management and Mitsubishi Corporation, the Japanese conglomerate.

Under Mr Fitzpatrick, who launched Ovo in 2009, the company positioned itself as a challenger brand offering superior service to the industry’s established players.

Ovo’s transformational moment came in 2020, when it bought the retail supply arm of SSE, transforming it overnight into one of Britain’s leading energy companies.

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Its growth has not been without difficulties, however, particularly in relation to its challenged relationship with Ofgem and a torrent of customer complaints about overcharging.

Justin King, the former J Sainsbury chief who now chairs Ovo, has made repairing its regulatory relationships a priority for the company.

He also oversaw the recruitment of David Buttress, who was briefly Boris Johnson’s cost-of-living tsar after leaving the top job at Just Eat, as its chief executive.

Key to Ovo’s longer-term valuation will be the performance of its technology platform, Kaluza, which was set up to license software to other energy suppliers and provides customers with smart electric vehicle charging and heat pumps.

Ovo announced last year that AGL Energy, one of Australia’s biggest energy suppliers, had bought a 20% stake in Kaluza at a $500m (£395m) valuation.

The British energy company has also entered the electric vehicle car charging sector under the brand Charge Anywhere, adding tens of thousands of public charging points across the UK.

Iberdrola bought Scottish Power in 2007 in a deal valuing the company at more than £11bn.

Next week, the UK’s energy price cap will fall by 7% to £1,720 a year, following an announcement by Ofgem, the industry regulator.

Ovo and Scottish Power both declined to comment.

Nike’s costs will go up $1bn (£728m) this year if US President Donald Trump’s tariffs remain at the current level, the company has told investors.

It follows a warning from the sports brand last month that it would raise prices due to the taxes imposed on imports.

Work to bring down costs is under way, including reducing supplies from China to the US.

It’s to reduce the amount of footwear made in China and imported to the US from 16% currently to a “high single digit” figure with Chinese supply being “reallocated to other countries around the world”.

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On 2 April, Mr Trump announced country-specific tariffs which hit China hardest and escalated after several rounds of retaliatory rises.

After an agreement between Washington and Beijing the levy was brought down from a 145% tariff to 30% on Chinese goods.

Price rises for consumers will start to come into effect in the autumn.

The latest warning on tariffs comes as Nike reported the worst quarterly results in more than three years.

Revenues were $11.1bn (£8.1bn) – the lowest since the third quarter of 2022.

It has been dealing with the after-effects of an unsuccessful move to sell direct-to-consumer with Wall Street analysts also critical of its dependence on lifestyle products and reliance on fashion trends.

Nike chief executive Elliott Hill had returned from retirement last year to again take the top job at the company.

The worst of the trade wars have already occurred, Mr Hill said, with “the headwinds to moderate from here”.

Police investigating the Horizon Post Office scandal have now identified seven suspects, with more than 45 people classed as “persons of interest”.

A “scaled-up” national team of officers has been in place for over six months as part of Operation Olympos – dedicated to looking at crimes related to the Horizon Post Office scandal.

The number of suspects has increased to seven since before Christmas, as part of a UK-wide investigation involving 100 officers.

Four have now been interviewed under caution.

Hundreds of subpostmasters were wrongfully convicted of stealing after faulty computer software created false accounting shortfalls in Post Office branches between 1999 and 2015.

Commander Stephen Clayman, Gold Command for Operation Olympos, described a “huge shift” in terms of their investigation and “significant progress”.

“We’ve got over four million documents that are going to rise to about six million documents,” he said, “but we’re beginning to methodically work through those and looking at individuals who are associated with certain prosecutions.”

He described a “pool of about 45 people plus” classed as “persons of interest”, with that number “expected to grow”.

He added that officers have questioned “some” in the past and “more recently” and are looking at the offences of perverting the course of justice and perjury.

The “wider pool” of persons of interest is made up of Post Office investigators, lawyers, and “management” across Fujitsu and the Post Office.

The team of officers will be identifying actions which could amount to criminal offences on both an individual and corporate basis.

Any decisions made on whether to charge will not happen until after the Post Office inquiry findings are “published and reviewed”.

The Operation Olympos officers are part of four teams – a London hub and three regional teams – who have been described as “highly motivated” across England and Wales.

Police Scotland and the Police Service of Northern Ireland are also helping.

Cmdr Clayman said that officers “will be building a robust case” to pass on to the Crown Prosecution Service.

He also added that, compared to the inquiry, his officers will have to “prove this to the criminal standard…a much, much higher standard”.

He described feeling “optimistic” and “confident” that the teams will have “some successful outcomes”, and said they are “working as hard and as quickly as (they) can”.

Teams are involved in what has been described as a “focused strategy which gets to the heart of the issues”.

Their investigations are being overseen by the National Police Chiefs’ Council and the Metropolitan Police.

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Victims have also been told that the police will not be reinvestigating every case but “taking a speculative look at cases” to focus on key people involved and evidence for prosecution.

Operation Olympos is also making use of special software to help process the amount of evidence to sift through material in relation to key events and identified cases.

Of the four suspects interviewed under caution, two were questioned in late 2021, one in late 2024 and the most recent in early 2025.