AquaInvest Acquisitions Ltd / South Staffordshire plc

OFT closed case: Anticipated acquisition by AquaInvest Acquisitions Limited of South Staffordshire plc.

Affected market: Water services

No. ME/1374/04

The OFT's decision on reference under section 33(1) given on 29 November 2004

PARTIES

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.

TRANSACTION

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 been extended.

JURISDICTION

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.

RELEVANT MARKET

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.

ASSESSMENT

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.

DECISION

This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.

Published 29 November 2004