{"id":62277,"date":"2015-09-30T06:00:25","date_gmt":"2015-09-30T06:00:25","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=7d2fd97cf4d42f4b6b5022f4579a74d4"},"modified":"2015-09-30T06:00:25","modified_gmt":"2015-09-30T06:00:25","slug":"press-release-cma-provisionally-clears-water-merger","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=62277","title":{"rendered":"Press release: CMA provisionally clears water merger"},"content":{"rendered":"
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In June 2015<\/a>, the completed acquisition by Pennon Group plc (the owner of South West Water Limited) of Bournemouth Water Investments Limited (which operates Bournemouth Water) was referred for an automatic in-depth investigation. The Competition and Markets Authority (CMA<\/abbr>) had to assess whether the merger could be expected to prejudice the ability of Ofwat<\/abbr> to make comparisons between different water companies for the purpose of its regulatory functions.<\/p>\n

In its provisional findings<\/a> today, the CMA<\/abbr> has concluded that the merger is not likely to prejudice Ofwat<\/abbr>\u2019s ability to compare water companies\u2019 performance and set price controls. <\/p>\n

During the inquiry it examined how the merger might affect the Water Services Regulation Authority\u2019s (Ofwat<\/abbr>) ability to make comparisons in each of the following areas: setting wholesale price controls; setting retail price controls; setting wholesale quality of service performance targets; improving retail quality of service; and spreading best practice.<\/p>\n

Chair of the Pennon \/ Bournemouth Water inquiry group, Simon Polito, said: \t\t\t\t\t\t\t<\/p>\n

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The use of comparisons between water companies will continue to play a significant role in the regulation of this sector for some time to come. After the merger, Ofwat<\/abbr> will be left with 17 water company comparators to use for benchmarking and in setting targets to improve performance.<\/p>\n

Our examination of Ofwat<\/abbr>\u2019s econometric modelling, and its wider use of comparisons, indicates that the merger is not likely to harm Ofwat<\/abbr>\u2019s ability to set appropriately demanding targets for the benefit of customers, given the number of different companies that will remain. We are now consulting on this provisional decision and look forward to hearing the views of interested parties.<\/p>\n<\/blockquote>\n

A full copy of the provisional findings report will be available shortly on the case page<\/a> along with full details of the investigation. <\/p>\n

The CMA<\/abbr> is expected to publish its final report by 22 November 2015.<\/p>\n

The CMA<\/abbr> would like to hear from all interested parties about the provisional findings, in writing, by 21 October 2015. To submit evidence, please email pennon.bournemouthwater@cma.gsi.gov.uk<\/a> or write to: <\/p>\n

\n
\n

Project Manager
\n
Pennon \/ Bournemouth Water merger inquiry
\n
Competition and Markets Authority
\n
Victoria House
\n
Southampton Row
\n
London
\n
WC1B 4AD
\n\n<\/p>\n<\/div>\n<\/div>\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. \t\t\t\t\t<\/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 [in England and Wales] 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. In December 2014, Ofwat<\/abbr> determined price controls and quality of service targets for 18 water companies in England and Wales. These came into force on 1 April 2015 and will apply until 31 March 2020. The next price determination will be in 2019, setting price controls for 2020 onwards.<\/li>\n
  4. The Water Act 2014 makes changes to the regime which creates exceptions to 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 a more in-depth investigation is required on account of any concerns that the merger could prejudice Ofwat<\/abbr>\u2019s ability to make comparisons between water companies. The relevant provisions are not yet in force and so this merger was subject to a mandatory reference.\t\t\t\t\t<\/li>\n
  5. The CMA<\/abbr>\u2019s panel members of the merger Pennon \/ Bournemouth Water inquiry group are: Simon Polito<\/a> (Chair), Sarah Chambers<\/a>, Jayne Scott<\/a> and Andrew Popham<\/a>\t\t<\/li>\n
  6. Enquiries should be directed to Simon Belgard (simon.belgard@cma.gsi.gov.uk<\/a>, 020 3738 6472).\t\t<\/li>\n
  7. For 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 provisionally cleared the purchase of Bournemouth Water by South West Water.<\/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\/62277"}],"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=62277"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/62277\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=62277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=62277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=62277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}