Affected market: Water services
The OFT's decision on reference under section 33(1) given
on 29 November 2004
AquaInvest Acquisitions Limited (Aqua) is an acquisition vehicle owned
by First Islamic Investment Bank EC (FIIB), a Bahrain based investment
bank. South Staffordshire plc (South Staffs) owns the South
Staffordshire Water, a regulated supplier of water services in the
Midlands. It also owns several non-regulated businesses providing
services such as customer management, pipeline repair and mineral
water. South Staffs' UK turnover was £72.8 million to 31 March 2004.
Aqua will acquire 100 per cent of South Staffs. The parties notified on
1 November and the statutory deadline is 29 November 2004, which has not
As a result of this transaction Aqua and South Staffs will cease to be
distinct. The UK turnover of South Staffs exceeds £70 million, so the
turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act)
is satisfied. The OFT therefore believes that it is or may be the case
that arrangements are in progress or in contemplation which, if carried
into effect, will result in the creation of a relevant merger situation.
The parties do not overlap in the supply of any good or service.
THIRD PARTY VIEWS
No third party expressed concerns. Ofwat were also unconcerned.
Neither Aqua nor FIIB have any shareholding in any UK water enterprise.
Accordingly no mandatory reference under the Water Industry Act 1991 is
triggered as only one water enterprise is involved in this transaction.
No overlaps or vertical issues are created by the merger. Consequently,
the OFT does not believe that it is or may be the case that the merger
may be expected to result in a substantial lessening of competition
within a market or markets in the United Kingdom.
This merger will therefore not be referred to the Competition Commission
under section 33(1) of the Act.
Published 29 November 2004