Veolia Water buys United Utilities principal non-regulated water interests

Photo source: Paul Hipwell

United Utilities has today announced it has agreed to sell its principal non-regulated water interests in the UK and Europe to Veolia Water plc for £174.2 million. In Europe Veolia is acquiring a 58% stake in Sofiyska Voda that supplies 1.3m residents of Sofia in Bulgaria with drinking water. It has also acquired stakes in the water supplier for Tallin in Estonia and the city of Biesko Biala in Poland.  This strengthens Veolia’s position in central Europe, a key market for the company.

In the UK, Veolia is acquiring from United stakes in three PFI contracts in Scotland (Tay, Moray and Highland wastewater treatment plants) as well as the contract to manage the building of the huge new Brighton wastewater plant for Southern Water. In addition it is buying UU’s stake in the 2010-15 capital delivery contract with Southern Water.

The move makes Veolia the leading player in the non-regulated water sector in the UK as well as strengthening its position in central Europe. It marks an important milestone for United Utilities as it nears the conclusion of its strategy to sell off non-core business. There are now only two water companies left with significant activity in the non regulated sector, Pennon and Severn Trent.