Octopus Energy to buy failed British energy supplier Bulb

LONDON (Reuters) -Britain said on Saturday it had approved a deal for Octopus Energy to buy smaller firm Bulb, which was one of the largest energy suppliers to collapse last year due to soaring wholesale gas and electricity prices.

About 1.5 million Bulb customers will be transferred to Octopus as part of a deal reached late on Friday with the special administrators of London-based Bulb, the British government's business department said in a statement.

"Last night's sale will bring vital reassurance and energy security to consumers across the country at a time when they need it most," Business and Energy Secretary Grant Shapps said. "This is a fresh start."

Bulb collapsed last November after failing to secure funding as regulator Ofgem's energy price cap prevented it and other suppliers from passing on rising costs to customers.

It was placed under the government-funded Special Administrator Regime to ensure customers' supplies would face no disruption and their credit balances would be protected.

The government will also provide funding to ensure Bulb's special administration is wound up in a way that protects customers' supplies, it said. It can recoup those costs later through levies on the industry.

(Reporting by Sachin Ravikumar;Editing by Andrew Cawthorne and Louise Heavens)