{"id":60911,"date":"2015-09-02T13:02:40","date_gmt":"2015-09-02T13:02:40","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=ffcead668d1ff87180aa0f16e0a542fc"},"modified":"2015-09-02T13:02:40","modified_gmt":"2015-09-02T13:02:40","slug":"press-release-cma-consults-on-draft-water-mergers-guidance","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=60911","title":{"rendered":"Press release: CMA consults on draft water mergers guidance"},"content":{"rendered":"
\n

The draft guidance<\/a> has been produced because of changes to the special water merger regime in the Water Act 2014 (the Act<\/abbr>), which are expected to come into force in November this year.<\/p>\n

In particular, to encourage beneficial water mergers, the Act<\/abbr> removes the need for all water mergers to be automatically referred for an in-depth phase 2 investigation, gives the Water Services Regulation Authority (Ofwat<\/abbr>) a statutory role in a phase 1 investigation and in line with the general merger regime, gives the Competition and Markets Authority (CMA<\/abbr>) the power to accept undertakings in lieu of a reference to a phase 2 investigation. In light of these changes the CMA<\/abbr> wants to ensure that it has good procedures in place to assist with the implementation of the new regime.<\/p>\n

Unlike other mergers the CMA<\/abbr> examines, the CMA<\/abbr>\u2019s role in water mergers is to assess whether the merger has a negative impact on Ofwat<\/abbr>\u2019s ability to make comparisons between water companies.<\/p>\n

The new draft guidance explains the new water merger regime and how the CMA<\/abbr> will approach its assessment of water mergers. This includes what procedures the CMA<\/abbr> will follow and the approach it will take for the analysis.<\/p>\n

Where the CMA<\/abbr> finds that a water merger is likely to raise concerns this guidance will assist water companies to understand what actions can be taken (by the CMA<\/abbr> or merger parties) and the likely approach of the CMA<\/abbr> to address any concerns identified.<\/p>\n

The guidance also explains how the CMA<\/abbr> and Ofwat<\/abbr> will work together in the new regime. It contains an appendix which details an agreement between the CMA<\/abbr> and Ofwat<\/abbr> on the working arrangements during the initial phase 1 investigation.<\/p>\n

The consultation is open for 6 weeks and is due to end on 15 October 2015 after which the CMA<\/abbr> will finalise the guidance.<\/p>\n

Notes for editors<\/h3>\n
    \n
  1. The CMA<\/abbr> is the UK\u2019s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.<\/li>\n
  2. Under the Water Industry Act 1991 (as amended by the Enterprise Act 2002) the CMA<\/abbr> has a duty to make an automatic reference to a phase 2 investigation if it believes that it is or may be the case that a merger of any 2 or more water enterprises has taken place and (i) that the value of the turnover of the target water company exceeds \u00a310 million; and (ii) that the acquiring firm already owns water companies that each has turnover exceeding \u00a310 million.<\/li>\n
  3. \nThe Act<\/abbr> makes changes to the regime which will remove the CMA<\/abbr>\u2019s duty to automatically refer water mergers for a phase 2 investigation. Once the new regime commences, water mergers will therefore include a phase 1 merger investigation to assess whether any concerns that the merger could prejudice Ofwat<\/abbr>\u2019s ability to carry out its regulatory functions merit a more in-depth investigation.<\/li>\n
  4. The Department for Environment, Food, and Rural Affairs expects to commence the changes to the special water merger regime in the Water Industry Act 1991 (as amended by the Act<\/abbr>) in November 2015.<\/li>\n
  5. \nOfwat<\/abbr> is the independent economic regulator for water and sewerage services in England and Wales. There are 18 incumbent water and\/or sewerage regional monopolies which are regulated by Ofwat<\/abbr>. Ofwat<\/abbr> compares information between water enterprises (among other things) to regulate prices, identify good performance to encourage best practices, and set incentives for water companies to improve their quality of service.<\/li>\n
  6. \nOfwat<\/abbr> consulted on its future approach to mergers and statement of method in May 2015.<\/li>\n
  7. The CMA<\/abbr> and its predecessor bodies the Office of Fair Trading and the Competition Commission have examined 10 mergers between water companies since 1990.<\/li>\n
  8. Enquiries should be directed to Simon Belgard (simon.belgard@cma.gsi.gov.uk<\/a>, 020 3738 6472) or Siobhan Allen (siobhan.allen@cma.gsi.gov.uk<\/a>, 020 3738 6460).<\/li>\n
  9. For more information on the CMA<\/abbr>, see our homepage<\/a> or follow us on Twitter @CMAgovuk<\/a>, Flickr<\/a> and LinkedIn<\/a>. Sign up to our email alerts<\/a> to receive updates on merger cases.<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    The CMA has today opened a consultation on the draft of its new guidance covering the water mergers regime.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/60911"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60911"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/60911\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}