South Staffordshire Plc/Cambridge Water PLC merger inquiry - CC invites evidence

5 Jan 2012

The CC has been asked to decide whether the merger may be expected to prejudice the ability of the Water Services Regulation Authority (Ofwat) to make comparisons between water enterprises for the purposes of assessing performance and setting price controls.

The OFT has a duty to refer mergers involving water companies to the CC if it believes that both the target and the acquiring water company have a turnover of more than £10 million each. South Staffordshire Water PLC is owned by South Staffordshire Plc. The CC last looked at a water merger in 2006/07 when it investigated a merger between Mid Kent Water and South East Water (PDF, 100 Kb) .

The CC is expected to report by 20 June 2012.

The CC would like to hear from all interested parties, in writing, by 25 January 2012. To submit evidence, please email Stafford.Camb@cc.gsi.gov.uk or write to:

Inquiry Manager (South Staffs/Cambridge Water inquiry)
Competition Commission
Victoria House
Southampton Row
LONDON
WC1B 4AD

Notes for editors

1. The Reference Test—under the Water Industry Act 1991 (as amended by the Enterprise Act 2002) the OFT has a duty to make a reference to the CC if the OFT believes that it is or may be the case that a merger of any two or more water enterprises has taken place or arrangements are in progress which would result in such a merger. The duty does not apply if the value of the turnover of the water enterprise being taken over or the value of the turnover of each of the water enterprises belonging to the person making the takeover does not or would not exceed £10 million.

2. The statutory questions the CC has to answer in respect of the merger are:

(a) whether a water merger has taken place; and

(b) if so, whether that merger has prejudiced, or may be expected to prejudice, the ability of Ofwat in carrying out its functions by virtue of the Water Industry Act 1991, to make comparisons between different water enterprises.

3. The CC has a 24-week period in which it is required to publish its report, which may be extended by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.

4. Enquiries should be directed to Rory Taylor or Siobhan Allen on 020 7271 0242.