London-based Octopus Energy has signed an agreement with Impello, a subsidiary of ShellPetroleum Company Ltd., to purchase Shell Energy's residential business in the United Kingdom and Germany.

The acquisition follows a competitive process conducted by Shell and includes 1.4 million household electricity customers (2.5 million metering points) and 500,000 broadband customers, said Octopus Energy.

The company will grow to nearly 300,000 customers in Germany and 6.5 million customers in the United Kingdom. It did not disclose the financial terms of the deal.

Subject to regulatory approvals, the acquisition is expected to close in the fourth quarter of 2023. Shell said the sale is part of plan announced earlier this year to exit its household energy businesses in the United Kingdom, Germany and the Netherlands.

The two companies are also exploring a partnership on EV charging.