Residents of Barnet, Brent, Ealing, Enfield, Harrow and Hillingdon will see their water provision change hands after Veolia, the French utilities giant, today sold its water business in a deal worth £1.2 billion.
It’s the first major sell-off by the world’s largest water supplier as it attempts to cut its massive debt pile. Chief executive Antoine Frérot last year set out drastic restructuring plans to get the firm’s borrowings below €12 billion (£9.6 billion) by the end of 2013.
His plans, which include Veolia quitting half of the 70 countries where it operates, forced Frérot to overcome a boardroom coup orchestrated by his former mentor, Henri Proglio, the boss of energy giant EDF, earlier this year.
Today’s sale sees the business that supplies three million Britons’ homes sold to Rift Acquisitions, a joint venture of managed infrastructure investment funds run by Prudential and Morgan Stanley.
Veolia is keeping just a 10% stake in the regulated water business.
Its remaining water business in Britain is an outsourcing division which manages infrastructure and carries out water treatment. “This first significant divestment shows that we are moving in the right direction,” said Frérot.
“The transformation of Veolia is progressing at a good pace,” he added.
The deal is the latest in a busy period for Britain’s water industry, which last year saw Asia’s richest man Li Ka-shing buy Northumbrian Water, in a deal which was worth
£4.7 billion.
The Hong Kong company agreed to sell Cambridge Water to HSBC as part of the deal to avoid competition issues.
Elsewhere, Thames Water, which is owned by Australian bank Macquarie, has sold stakes to the BT Pension Fund and sovereign wealth fund the Abu Dhabi Investment Authority.
