Parent company of South West Water, Pennon Group Plc, has purchased Bournemouth Water from Sembcorp for £100.3 million in cash. As part of the deal, £86.9 million of external debt has been assumed by Pennon.
The deal has been agreed and the acquisition will be referred to the Competition and Markets Authority (CMA) automatically, and is part of Pennon Group’s broader strategy to restructure operations at South West Water in time for the statutory reform of the non-household retail market in 2017.
Devon-based Pennon has been under pressure from water regulator Ofwat to reduce costs and improve service.
Pennon’s Executive Director and South West Water’s Chief Executive, Chris Loughlin, commented: “Bournemouth is a top performing water company and is an excellent business fit with South West Water’s existing operations. The combines business will provide an enhanced platform for innovation and growth ahead of market liberalisation in 2017 and will better serve both Bournemouth and the South West, delivering tangible benefits to customers and shareholders.
“Bournemouth Water has a proud pedigree and high service standards. Like South West Water, it operates in a varied rural and urban landscape, with an economy reliant on tourism and the natural environment. We look forward to building on its strengths and continuing to deliver high quality customer services with some of the lowest bills in the industry.”
Managing Director of Bournemouth Water, Bob Taylor, added: “We welcome the acquisition by the Pennon Group. South West Water has extensive knowledge of the UK water industry and was the only water and sewerage company to have been awarded ‘enhanced’ status for its business plan. We look forward to the opportunities being part of the Pennon Group will bring.”