- Pennon Group acquires SES Water
- SES faced performance concerns
- Regulatory actions and pending approval
Pennon Group paid £380 million to acquire Sutton and East Surrey (SES) Water, aiming to expand its presence in southern England.
Ofwat, a water regulator, indicated in October that SES and other industry companies needed to improve their financial performance.
The transaction is awaiting Competition and Markets Authority approval.
SES, one of six water-only providers in England, serves consumers in Southern England alongside Thames Water and Southern Water for sewage treatment services.
This sale occurs amid increasing concerns about the UK water sector, facing allegations of excessive executive spending following leakage and pollution incidents.
In February 2023, Japanese owners Sumitomo Corporation and Osaka Gas listed SES for sale amid nationwide protests against water companies.
If approved, Pennon Group, South West Water’s owner, will gain SES’s 750,000 customers, similar to its past acquisitions of Bournemouth Water and Bristol Water.
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SES, among several companies, was ordered by Ofwat to reimburse customers for missing critical targets. It faced scrutiny for performance indicators on leakage, supply, and pollution reduction.
Ofwat also expressed concern about the financial stability of several companies.
Ofwat evaluates water corporations in England and Wales based on “stretching” targets set in 2019 over five years. Failure to meet objectives results in limitations on cash withdrawals from customers.
Instead of a lump sum refund in 2024–25, companies must reimburse customers through bill reductions.
