A water company fined for illegal sewage dumping has splashed out £380million on buying a rival despite pressure to invest in stopping leaks and pollution.
Pennon, which owns South West Water and recently acquired Bournemouth Water and Bristol Water, has bought Sutton and East Surrey (SES) Water from its Japanese owners.
Industry regulator Ofwat last year named SES, which has £291million of debt and supplies 750,000 customers in south-east England, among the four worst performing water companies financially.
But South West Water has also come under fire for its performance and was last year fined £2.15million for illegal sewage spills in Devon and Cornwall.
Chief executive Susan Davy said: ‘SES Water is a fantastic fit for Pennon as we further expand our presence in water supply.’
Chief executive Susan Davy (pictured) said: ‘SES Water is a fantastic fit for Pennon as we further expand our presence in water supply’
The industry has faced sustained criticism over high levels of debt, leaks and sewage spills, with operators under pressure to invest in infrastructure.
Pennon is raising £180million from shareholders to help fund the takeover.
The plan to buy SES from Sumitomo Corporation and Osaka Gas must be approved by regulators at the Competition and Markets Authority with input from Ofwat.
Russ Mould, investment director at AJ Bell, said: ‘Pennon’s decision to spend £380million may raise eyebrows.’
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