The decision by the Competition Commission at the end of May to approve the acquisition by South Staffordshire plc of Cambridge Water PLC - the first time it has given its unconditional approval (without any accompanying commitments or remedies) under the water special merger regime – has flagged up some interesting possibilities for future developments in the sector.
Today Waterbriefing is publishing a new white paper by Suzanne Rab, partner and UK-qualified lawyer resident in King & Spalding’s London office who advises clients across all areas of European and UK competition law.
UK Competition Commission clears water merger explores the issues surrounding the takeover. Historically, consolidation in the water industry has been challenging and mergers between the larger water companies have been prohibited or subject to conditions
Under the regime the Office of Fair Trading (OFT) is under a duty to make a mandatory reference to the Commission of anticipated or completed mergers between two water enterprises if certain thresholds are exceeded. Owing to the low turnover tests, the practical effect of this regime is to require a reference to the CC in the case of an acquisition of any of the water or water and sewerage companies in England and Wales by a company that already has an interest in another such company in England and Wales.
Among the issues explored by Suzanne Rab is whether a lighter touch approach to water mergers will be adopted in the future following proposed changes to the current water special merger regime.
The UK water sector continues to be a target for both UK and overseas investors who are attracted by the stability and transparency to date of the current regulatory regime. The Government looks set to make potentially significant changes to how the water and wastewater companies operate in the next few years – without “spooking the investors” It will be interesting to see whether this accompanied by further consolidation in the sector via a corresponding increase in mergers and takeovers amongst the larger utilities.
Register with waterbriefing, which is free, to access the paper.Then Click here to read Suzanne Rab’s paper in full.
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