IB 01/12 Ofwat confirms position on acquisition of Bristol Water by Capstone

Following consultation, this information bulletin confirms that there are no regulatory issues requiring further action following CSE Water UK Limited’s (CSE) acquisition of a 70% stake in Bristol Water Holdings UK Limited (BRUK) from Sociedad General de Aguas de Barcelona, S.A. (Agbar). Capstone Infrastructure Corporation (CIC) is the ultimate parent company of CSE. BRUK is a holding company of Bristol Water, an appointed water undertaker regulated by Ofwat.

Although Ofwat has no formal role in acquisitions or mergers of water companies, it seeks to ensure that any owner of a water company is ‘fit and proper’ to provide such an essential service.

Ofwat did not see any reason to challenge Bristol Water’s view that Capstone and CSE were the appropriate entities to provide the Condition P Ultimate Controller undertakings. Furthermore Ofwat did not propose to modify Bristol Water’s Appointment Condition F as it already contained the full suite of the required financial ring-fencing conditions.

The consultation was issued in December 2011 and closed 20 January 2012.

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Notes to Editors:

 

  1. Ofwat (The Water Services Regulation Authority) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.
  2. Ofwat regulates through the provisions of the Appointment of each company and can introduce suitable Appointment modifications if necessary, subject to appeal by the company to the Competition Commission in the event of disagreement.
  3. Licence Condition F relates to accounting information and the financial ring fence
  4. Licence Condition P relates to the role of the Appointee’s Ultimate Controller and the UK holding company.
  5. The Consumer Council for Water was the sole respondent to Ofwat’s consultation. They support the view that no modifications to the conditions of Bristol Water’s Appointment are required.
  6. Media enquiries to the Ofwat Press Office: 0121 644 7642 / 7616 / 7696 or [email protected].