Yorkshire Water owner agrees £3bn takeover

London - Yorkshire Water's owner Kelda is to be acquired by Saltaire Water, a consortium including Citigroup Alternative Investments LLC (CII), GIC Special Investments Pte Ltd, Infracapital Partners LP and HSBC Bank plc.  The deal, which is due to be completed early in the New Year, values the UK water and wastewater services group at around £3 billion. the companies announced 26 Nov.

Kelda, which lists Yorkshire Water as its main subsidiary, employs over 3,000 people, providing water and wastewater services to more than 4.7 million people and 140,000 businesses. Kelda’s principal non regulated business, Kelda Water Services Ltd, focuses on waterwaste water and business services.

"This offer is good for customers, employees and shareholders. The members of the consortium are highly credible institutions and, as investors, are taking a long term perspective on our business with a view to continued delivery of excellent service levels to customers, and opportunities for our employees," said Kevin Whiteman, chief executive of Kelda.

According to the consortium, the UK water sector represents a core opportunity for infrastructure investors, combining a transparent and stable regulatory regime with the potential for attractive growth through follow-on investments.  In 2006, Ofwat named Yorkshire Water as the UK’s most efficient water and sewerage company with four ‘A’ ratings for efficiency. Yorkshire Water was ranked second in Ofwat’s Overall Performance Assessment table for 2006/7.

Consortium representative Juan Béjar Ochoa added: "Kelda has a deserved reputation for excellence in its customer service and financial performance within the UK water sector. It offers the potential to deliver further growth and investment opportunities, and the Consortium will support Kelda’s management to ensure that Kelda’s performance is maintained to the benefit of its customers and other stakeholders."

Since 2000, Kelda has focused on water and wastewater services, divesting non-core businesses which included the disposal in 2003 of a 46% stake in Waste Recycling Group plc. More recently, on 1 May 2007, Kelda sold its US water supply business, returning around £750 million to shareholders. For the year ended 31 March 2007, Kelda reported revenues of £832.6 million (2006: £779.4 million) and pre-tax profits from continuing operations of £241.2 million (2006: £224.3 million).