Macquarie sells remaining Thames Water Stake

AUSTRALIAN infrastructure fund Macquarie has sold its 26.3% stake in UK water company Thames Water Utilities to Canadian pension fund OMERS and the Kuwait Investment Authority.

The terms of the deal were not disclosed but according to the Financial Times, the stake in Kemble Water Holdings, Thames Water's parent company, is worth around £1.35bn, based on Thames Water's capital value of just under £11.9bn. Thames Water supplies 2.6bn l/d of water to 9m customers in London and the Thames Valley.

Macquarie European Infrastructure Fund 2 (MEIF2), which holds the majority of the stake, along with two other Macquarie-managed funds, sold the stake to Borealis Infrastructure, the infrastructure investment manager of OMERS, and Wren House Infrastructure Management, the infrastructure investing arm of the Kuwait Investment Authority.

Macquarie-managed funds have held interests in Thames Water since 2006, and the group says that it has overseen investment of £11bn, including reducing leakage, major improvements at its five sewage works, increased generation of renewable energy from waste, and the opening of the Lee Tunnel capable of capturing 16m t of sewage a year.

The deal is one of several in the UK water industry this year. In February, Australian funds management company Hastings acquired the remaining 50% of the UK's largest water-only company South East Water for around £200m, while Fiera Infrastructure bought a 2.4% stake in Thames Water last week for US$149m. Analysts say UK utilities are increasingly attractive investments due to guaranteed steady returns.