CC formally clears water merger
31 May 2012
The Competition Commission (CC) has today formally cleared South Staffordshire Plc’s (SS Plc’s) completed acquisition of Cambridge Water PLC (CAM).
This confirms the CC’s provisional decision, which was published last month. For more details, see provisional findings news release.
The CC was asked in January (PDF, 29 Kb) 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.
South Staffordshire Water PLC (SST) supplies water to close to 550,000 customers. CAM is one of the smallest water companies in England and Wales, supplying water to fewer than 130,000 customers.
A full copy of the final report is available on the inquiry home page, along with full details of the investigation.
Notes for editors
1. Under the Water Industry Act 1991 (as amended by the Enterprise Act 2002) the Office of Fair Trading (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 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) .
4. The members of the SS Plc/CAM merger Inquiry Group are: Simon Polito (CC Deputy Chairman and Chairman of the Inquiry Group), Ivar Grey, John Smith and Professor Michael Waterson.
5. 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.
6. Enquiries should be directed to Rory Taylor or Siobhan Allen on 020 7271 0242.
