Shell in Exclusive Talks to Buy Post Office's Broadband Division

Just a few years after venturing into the retail energy market, Shell is now the preferred bidder to take over Post Office’s broadband division.

Post Office signalled during the summer of 2019 that it was interested in offloading its telecoms business, with 500,000 broadband and landline customers. Broadband giants Sky and TalkTalk weighed in but a surprise bidder was oil and gas major Shell.

Shell already has some experience in the broadband market. When it purchased mid-sized energy supplier First Utility in 2018, it also acquired its broadband business. The rebranded Shell Energy Broadband now serves 130,000 broadband accounts.

Sky News is reporting that Shell is the favoured bidder and is in exclusive talks with Post Office. The deal, which is expected to take several weeks to finalise, is reportedly for less than £100 million.

Post Office is moving away from the broadband market in order to focus on other aspects of its business, including its core mail and parcels operations and banking, travel services and bill payments. Chief executive Nick Read is also considering options for the business’ insurance arm.

Shell’s venture into domestic utilities is part of the FTSE-100 company’s diversification but is also seen as an attempt to whitewash—or rather greenwash—its heavily polluting oil and gas arm. 

Shell Energy advertises it “100% renewable” electricity, which it doesn't itself generate or buy directly from generators but rather matches with Renewable Energy Guarantees of Origin (REGO) certifications.

A Times investigation revealed that REGOs can be purchased for as little as 93p per customer per year. That means Shell Energy could be offering "renewable" electricity to its 870,000 energy customers for as little as £800,000 a year.

Meanwhile, Royal Dutch Shell remains one of the twenty companies identified by the Guardian last year as responsible for a third of all global carbon emissions.

Neither Shell nor Post Office has commented on the reports of an impending sale.