(Alliance News) - Pennon Group PLC on Monday said its acquisition of Bristol Water Holdings UK Ltd has now been cleared by the UK regulator, with new price control measures satisfying any competition concerns.
Exeter-based water utility Pennon said its completed acquisition of neighbour Bristol Water now has received clearance from the Competition & Markets Authority, avoiding a phase 2 merger review.
In June of last year, Pennon acquired Bristol Water for an equity value of GB425 million and an enterprise value of GBP814 million, and was served shortly after with an initial enforcement order by the CMA.
In September, the CMA launched an investigation into whether the acquisition would prejudice UK water watchdog Ofwat's ability to make comparisons between water companies.
Pennon responded in December, offering to keep separate price controls for the Bristol Water area within the merged business. Pennon's South West Water serves Cornwall, Devon and parts of Dorset and Somerset, with Bristol Water serving the Bristol region, bordering Somerset.
This offer was provisionally accepted by the CMA last month.
The CMA confirmed on Monday it would not continue the investigation into a phase 2 merger enquiry, and the price control measures from Pennon would be in effect immediately.
"We have a track record of delivery and are working across both businesses to deploy our proven integration strategy, which we are confident will deliver meaningful benefits for all stakeholders" said Pennon Chief Executive Officer Susan Davy.
"Alongside this, we are excited to further evolve our WaterShare+ unique customer share ownership scheme, offering Bristol Water customers a greater stake and say in the business."
Shares in Pennon were down 0.1% to 1,033.00 pence each in London on Monday morning.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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Pennon (PNN)