Ofwat has launched a new consultation on the acquisition of of Icosa Water Services Ltd by Macquarie – the Australian investment fund owns an 82% majority stake in Southern Water and was previously owner of Thames Water between 2006 and 2017.

The water sector regulator is seeking views on whether any issues arise out of the recent change of control which occurs when there is any change in who can materially influence the direction, strategy, or activities of a regulated company.

Considerations set out in the consultation document include:

• Ofwat’s assessment of the ownership structure.
• Ofwat’s assessment of the new owner identified as an Ultimate Controller as well as their capacity to be an owner of a regulated water company.

Ofwat said that in carrying out its own assessment it had reviewed information provided by the new owner and separately carried out its own investigations on the new corporate structure using publicly available information.

"We aim to ensure any Ultimate Controller of a water company has the integrity, and the operational and financial capability to run such an essential public service as a water utility"

The consultation paper says:

“We ask for views on our assessment of the incoming owner of Icosa Water and whether any additional steps need to be taken at the regulated company in light of the change of ownership, and our view of the entity we have identified as an Ultimate Controller…..

“In the interests of customers ...we aim to ensure that any Ultimate Controller of a water company has the integrity, and the operational and financial capability to run such an essential public service as a water utility.”

To assess the new owner of Icosa Water, Ofwat reviewed information it received from Icosa and the new investor itself, Macquarie Asset Management (MAM), through Macquarie European Infrastructure Fund Luxemburg GP s.a.r.l. Macquarie Asset Management is a company listed on the Australian Securities Exchange.

Icosa Water announced in December 2023 that Macquarie European Infrastructure Fund managed by MAM had agreed to acquire a 50% stake in Last Mile Infrastructure Group Ltd (LMI), the ultimate holding entity of Icosa Water.

The transaction completed on 28 October 2024. In August 2021 MAM acquired a majority stake in Southern Water on behalf of its long-term investors including pension funds and insurance companies.

In September 2024 the Competition and Markets Authority (CMA) cleared the anticipated acquisition by MAM of a jointly controlling interest in LMI.

The CMA found that while the acquisition by Macquarie Group Ltd (MGL), through its indirectly owned funds, of 50% of the issued share capital of LMI, was a relevant merger situation, it did not give rise to a realistic prospect of a substantial lessening of competition.

The asset management business of Macquarie Group, MAM is comprised of two groups, Private Markets and Public Investments.

Funds managed by MAM have been active investors worldwide since 1980 – a fund managed by MAM was a significant investor in Thames Water Utilities Ltd between 2006 and 2017.

MAM currently holds an interest in Southern Water Services Ltd through Macquarie Super Core Infrastructure Fund SCSp (MSCIF), who have a 82% majority stake. For completeness, the company has stated that MAM jointly controls Arqiva, which provides network and communications services to the broadcast and utilities sectors (including in relation to metering) in the UK.

Ofwat’s consultation paper explains that Macquarie Capital (MacCap) is a separate division within MGL, which operates independently from MAM and that MGL states that it operates strict information barriers between its different divisions (notably MAM and MacCap). The information barriers are affected through physical separation of teams and access restrictions preventing members from one business unit accessing the online systems used by another.

Ofwat says its change of control assessment has considered the ownership, operational activities and financial standing of the new investor in Icosa Water and has not identified any issues, based on the information it has received and considered to date. In addition, the assessment shows that MAM has significant investments and experience as an owner of assets in the infrastructure sector, including in the water sector in England.

“Therefore, we do not see a need to introduce additional protections in the licence directly as a result of the change in ownership,” the regulator concludes.

Ofwat is now seeking responses to the following consultation questions:

• Do you have any views on our commentary about the incoming owner?
• Do you agree that it is not necessary to place additional requirements in the licence of Icosa Water in respect of the change of control?
• What are your views on our identification of the Ultimate Controllers?

Comments on the consultation paper should be emailed to This e-mail address is being protected from spambots. You need JavaScript enabled to view it or posted to:

Financial Resilience Change of Control Consultation response, Ofwat, Centre City Tower, 7 Hill Street, Birmingham, B5 4UA.

Respondents who want to discuss any aspect of the consultation are asked to contact the Financial Resilience team by email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Deadline to submit comments is 20 March 2025 – click here to download the consultation paper.