Ofwat has agreed that no additional modifications to Icosa Water Services Ltd’s licence are required as a direct result of a change in ownership which will see Macquarie European Infrastructure and its subsidiary Connex Holdco Limited UK recognised as the Ultimate Controllers of Icosa Water Services Limited.

On 6 February 2025 the regulator published a consultation on change of ownership for Icosa Water Services Ltd which closed on 20 March 2025.

The consultation followed the acquisition of 50% of the shares in Last Mile Infrastructure Group Ltd (the ultimate holding entity of Icosa Water Services Ltd), by Macquarie European Infrastructure Fund 7 (MEIF7) via its subsidiary Connex Holdco itd UK.

Ofwat received one response to the consultation  United Utilities said the consultation raised important questions regarding when it is acceptable for such arrangements to be put in place when the incumbent had an associated relationship with a NAV operator.

Ofwat responded:

“As set out in our consultation, we asked 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.

“We are not able to approve or prevent changes of control from taking place, contrary to what United Utilities Water Limited appears to suggest, and therefore did not seek views on this point in the consultation.”

Ofwat said that in terms of any risks posed by Icosa Water Services Ltd. operating within the same corporate group as Southern Water, its assessment of the change of ownership had ascertained that the new owners Macquarie European Infrastructure Fund are part of a division within the Macquarie Group (MGL) which operates independently from the division that holds the investment in Southern Water.

MGL had stated that it operates strict information barriers between its different divisions, including the physical separation of teams and access to online systems.

Ofwat said that in the light of existing licence conditions, it did not consider that additional licence modifications are "necessary at this stage."

The licences of both Icosa Water Services Ltd. and Southern Water contain safeguards to ensure every transaction between the appointed business and any associated company is at arm’s length, so that neither can gives a cross-subsidy to the other. The licences also contain prohibitions on giving any guarantee or loan to an associated company without Ofwat's prior consent.

Following publication of the consultation, there has also been an internal reorganisation of the water division in the Last Mile group, which came into effect on 18 March 2025 and which impacts the direct ownership of Icosa Water Services Ltd.

The corporate structure of the group has been aligned into two operating divisions. IWSL has been moved in the structure to be a wholly owned subsidiary of Last Mile (Own and Manage) Ltd. IWSL also remains a wholly owned subsidiary of the Last Mile group of companies.

Ofwat concludes:

“Having reviewed the new corporate structure set out above and having taken account of the response to the consultation, our views on the identification of the Ultimate Controller and need for further licence modifications remain unchanged. As such, we conclude that no further steps need to be taken in relation to the change of ownership of Icosa Water Services Ltd.”