Merger Update: Pennon/Bristol Water

CMA invites comments on water sector merger remedy:

The Competition and Markets Authority (CMA) has opened a consultation on undertakings proposed by Pennon Group plc (Pennon) to address the prejudice to Ofwat's ability, in carrying out its functions, to make comparisons between water enterprises under the Water Industry Act 1991, over its acquisition of Bristol Water Holdings UK Limited (Bristol Water).

On 22 December 2022, the CMA announced that it would refer the acquisition for an in-depth investigation unless Pennon offered acceptable undertakings to address the CMA's concerns.

To address the CMA's concerns, Pennon have offered undertakings to provide separate reporting information for South West Water and Bristol Water - which will enable Ofwat to maintain separate wholesale water price controls, with separate revenue controls and revenue limits, for South West Water wholesale water activities and Bristol Water wholesale water activities from 1 April 2025; Pennon also acknowledges and agrees that Ofwat will maintain separate price controls for the South West Water wholesale water activities and Bristol Water wholesale water activities.

On 10 January 2022, the CMA announced that it would look in detail at these undertakings. The CMA has until 7 March 2022 to consider whether to accept the undertakings, or a modified version of them. As part of this process, the CMA is now consulting publicly on whether the proposals are sufficient to address the CMA's concerns.

Before reaching a final decision, the CMA is therefore inviting interested parties to make their views known. The deadline for responses is 28 February 2022.

The consultation on the undertakings and all other information relating to this merger investigation can be found on the case page at https://www.gov.uk/cma-cases.

In the event of media enquiries please email Press@cma.gov.uk.