Water company for sale – with £7bn price tag
At least three bidders have put in offers in the region of £7bn to buy Britain's biggest water company from its current owner, utilities multinational RWE.
Thames Water is up for grabs, as RWE attempts to offload its water portfolio to concentrate on electricity and gas supply. The giant is also selling off USA water company American Water.
Reading-based Thames Water is the largest water and wastewater services company in the UK, providing drinking water to eight million people and sewage services to 13 million customers.
The company supply area covers 5,000 square miles across London and the Thames Valley, from Kent in the east to Gloucestershire in the west.
It manages 20,000 miles of water mains and 40,000 miles of sewers, many of which inherited by the company in a poor state of repair as they were first put in place during the Victorian era and are now plagued with leaks.
With its core business based in the south east, company has also found itself severely affected by this summer’s droughts and is currently involved in a wrangle with London Mayor Ken Livingstone over plans to build a desalination plant on the tidal Thames to provide the city with potable water.
Despite its problems, the company reported record profits from last year at almost £250 million, up 31% on the previous year.
The three offers believed to be on the table come from British-based Terra Firma Capital Partners, a group led by the Australian Macquarie Bank and a third from a group led by UBS and the state of Qatar.
RWE bought Thames Water for £6.7bn in 2000 and is thought to be looking for offers in the region of £7bn.
It says it wants to shift the company and American Water as there are limited synergies between them and its core energy businesses.
In a statement Harry Roels, CEO of RWE, said: “The transactions will lead to greater transparency of the value of our water business.
“Both American Water and RWE Thames Water are market leaders in their respective regions.
“As stand-alone entities, they are well positioned to continue on their stable growth paths going forward and maintain the breadth and quality of their service.”