Three water businesses owned by France’s Veolia and serving more than 3.5 million people were yesterday sold in a deal worth £1.2bn.
Veolia Water’s Central, Southeast and East businesses, which cover towns including St Albans, Dover, Woking and Harwich, are to be sold to an infrastructure fund managed by Prudential-owned M&G and Morgan Stanley.
The three water companies have a combined annual turnover of £274m and collectively employ around 1,250 people.
Veolia Water, which will retain a 10 per cent stake in the water supply businesses, said the move would allow it to focus on its work as a leading provider of outsourced services to the UK water industry.
More than 1,000 people work for Veolia Water Outsourcing, helping to generate turnover in excess of £400m a year. The deal follows last summer’s sale of Northumbrian Water for £2.4bn to a Hong Kong-based investment firm headed by Cheung Kong Infrastructure, the firm controlled by Asian billionaire Li Ka-shing.
Paris-based Veolia employs more than 315,000 people worldwide and serves municipal and industrial customers in water, waste and energy management and in passenger transport.
Analysts said that the price Veolia will receive for the unit, which is widely seen as the most attractive it has put up for sale, beat expectations and the strength of the pound against the euro had helped prop up the deal’s value in euros.
International law firm Simmons & Simmons advised Veolia on the deal.