Bristol customers have been promised lower bills after the competition watchdog cleared Pennon Group Plc’s £425m takeover of Bristol Water following a lengthy investigation.
The Competitions and Markets Authority (CMA) has given its approval after accepting undertakings that separate price controls for the Bristol Water region will be maintained within a merged water business.
Exeter-headquartered Pennon, parent firm of South West Water, immediately said Bristol Water customers can now look forward to lower bills with the removal of the small company premium and benefit from Pennon’s WaterShare+ scheme, giving customers a stake and say in how the business operates.
Pennon acquired Bristol Water Holdings UK Ltd in June 2021 but the CMA started a full review and consultation process under the Water Industries Act 1991.
Pennon has now welcomed Bristol Water to a group comprising South West Water, Bournemouth Water and Pennon Water Services, which serves 3.2million customers across the Greater South West.
Under the merger Bristol Water, a water only company, will retain its brand and community identity with teams continuing to support the 1.2million customers the organisation provides drinking water services to.
Pennon also said its unique WaterShare+ scheme means that currently one in 16 households in the South West are shareholders and Pennon plans to extend this scheme to Bristol Water’s customers, during 2022.
Susan Davy, Pennon chief executive, said: “Today is a key milestone, bringing together the best of the best to deliver for our customers, communities, and the environment in the Greater South West.
“Alongside this, we are excited to further evolve our WaterShare+ unique customer share ownership scheme, offering Bristol Water customers a greater stake and say in the business.”
Pennon was listed as the South West’s fourth largest company, by turnover, in 2021 by the Western Morning News. The acquisition of Bristol Water grows the Pennon Group’s workforce to about 2,900. In 2021, it was accredited as a Best Place to Work.
Pennon said it will now continue to work collaboratively with Ofwat throughout the next steps of the merger process as it seeks to combine South West Water and Bristol Water into one licence and business entity.
It said the combined entity will enable the most effective and efficient delivery of services for customers in all the regions served, whilst also providing Ofwat with comparative cost and performance data.
Ms Davy said: “We have a track record of delivery and are working across both businesses to deploy our proven integration strategy, which we are confident will deliver meaningful benefits for all stakeholders.."
The CMA, in a statement, said: “The CMA has today accepted undertakings in lieu of reference to Phase 2 given by Pennon Group Plc under section 33D of the Water Industry Act 1991. The merger between Pennon and Bristol Water Holdings UK Limited will therefore not be referred to Phase 2 and the undertakings which have been signed by Pennon will come into effect from this date.”
