Macquarie to acquire majority stake in Southern Water

Macquarie Asset Management (Macquarie) has agreed to acquire a majority stake in Southern Water’s parent company, Greensands Holdings.

Southern Water provides essential services to 2.6 million water customers and 4.7 million wastewater customers across Kent, Sussex, Hampshire, and the Isle of Wight. Under the agreement reached with Southern Water’s existing shareholders, Macquarie will invest – on behalf of long-term investors including pension funds and insurance firms – over £1 billion (€1.17 billion) in new equity to recapitalise the business and implement a more sustainable financing strategy for Southern Water.

The capital injection will enable Southern Water to invest significantly to upgrade its network, with £2 billion (€2.3 billion) to be invested over the next four years to fix the pipes, pumping stations, and sewers which are underperforming and harming the local environment.

The major investment programme is equivalent to around £1,000 (€1,175) for each property in Southern Water catchment area and will allow the firm to access the resources it needs to improve its operational and financial performance, financial resilience, and relationship with its customers.

“Southern Water needs significant investment to improve its operational and environmental performance, and financial health,” said Leigh Harrison, head of Macquarie Infrastructure and Real Assets. “Without it, the business will be unable to fulfil the expectations of the millions of customers that rely on its services each day, or reduce its negative impact on the local environment.

“This major £1 billion (€1.17 billion) equity investment by one of our long-term infrastructure funds will help put Southern Water back on a stable footing and enable an ambitious multi-year transformation plan to make essential water and wastewater services in the South East of England more sustainable and resilient.

“While we expect Southern Water will have made substantial progress in addressing its issues by the end of 2025, we acknowledge the business’ transformation will take time and that is why we intend to own our stake in Southern Water over multiple regulatory periods.”

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