The Competition & Markets Authority CMA has approved Pennon Group’s takeover of Bristol Water following its investigation of the completed acquisition under the provisions of the Enterprise Act 2002 and the Water Industry Act 1991.
The CMA has accepted undertakings from Pennon Group as appropriate “to remedy, mitigate or prevent the prejudicial effect on Ofwat’s ability, in carrying out its functions, to make comparisons between water enterprises.”
Pennon has undertaken to ensure compliance with Ofwat’s PR19 determinations for South West Water (SWW) in respect of the SWW region and for Bristol Water (BRL) in respect of the BRL region until 31 March 2025. Pennon has also agreed to the removal of the small company premium (which is currently part of the BRL PR19 determination) and to share half of the merger-specific cost efficiencies with all customers of SWW and BRL in the period to 31 March 2025. This includes using the SWW WaterShare+ mechanism (which is currently part of the SWW PR19 determination).
The Group has also confirmed that it will ensure that SWW and BRL (or any successor merged business) both provide separate historical and forecast cost and cost driver information and any other activities Ofwat may “reasonably require to allow for the maintenance of robust separate price controls with separate revenue controls and revenue limits” from 1 April 2025.
Exeter based company Pennon has welcomed Bristol Water to the Group, which comprises of South West Water, Bournemouth Water and Pennon Water Services serving 3.2 million customers across the Greater South West.
Bristol Water, a water only company, will retain its local brand and community identity with teams continuing to support the 1.2 million customers the organisation provides drinking water services to.
Bristol Water customers can look forward to lower bills with the removal of the small company premium and benefit from Pennon’s pioneering WaterShare+ scheme, giving customers a stake and say in how Pennon Group operates.
The scheme is unique in the industry, with 1 in 16 households in the South West currently are shareholders - Pennon plans to extend the scheme to Bristol Water’s customers during 2022.
Susan Davy, CEO Pennon Group said:
“Today is a key milestone, bringing together the best of the best to deliver for our customers, communities, and the environment in the Greater South West.
Alongside this, we are excited to further evolve our WaterShare+ unique customer share ownership scheme, offering Bristol Water customers a greater stake and say in the business.”
The acquisition of Bristol Water grows the Group’s workforce to around 2,900 and the organisation is committed to making Pennon the best place to work in the region. Pennon is a UK-focused water infrastructure group, comprising South West Water (incorporating Bournemouth Water), Bristol Water, and Pennon Water Services.
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