South West utilities group Pennon has vowed to invest in Bristol Water, which it bought this week for £425m, promising a better service for its 1.2m customers.
Exeter-based Pennon, which already owns South West Water, bought Bristol Water from multinational asset management firm iCON Infrastructure and Itochu, one of Japan’s largest corporations. 
The deal means the profitable, 175-year old business is back in British ownership for the first time in more than a decade.
Its previous owners have included Canadian group Capstone Infrastructure, Gropo Agbar of Spain and French giant Suez.
Bristol Water supplies about half a million homes and businesses across the Bristol and north Somerset areas.
Pennon’s acquisition of Bristol Water comes a year after the sale of its waste management firm Viridor for £3.7bn to private equity house KKR.
Pennon chief executive Susan Davy, pictured, said: “We have ensured Pennon is well positioned for the future, reinvesting for growth, and retaining sufficient funds to drive further value.
“The acquisition of Bristol Water is the next step in the growth of the group, building on significant experience as a leader and consolidator in the industry. 
“This latest acquisition, building on a strong heritage and history, firmly cements Pennon as one of the leading UK water and wastewater companies.”
The company will extend its customer share ownership initiative WaterShare+, which Pennon says gives customers a stake, and a greater say, in the business.
Ms Davy said Pennon had a strong track record of delivery with a proven integration strategy and following its acquisition of Bournemouth Water in 2015 it had made efficiency improvements.
“Our value accretive acquisition will deliver meaningful benefits for both customers and shareholders,” she said.
“Alongside this acquisition, we intend to further evolve WaterShare+.
“When we launched WaterShare+ in 2020, we were thrilled to see one in 16 household customers in the region choosing to become Pennon shareholders.
“We will also look to expand our successful operating model – already utilised across South West Water and Bournemouth Water, with centralised control, streamlined processes and systems from each business supporting the delivery of outstanding services to customers and the environment.
“Increasing the size and scope of the group also unlocks the opportunity to realise cost efficiencies through sharing support services and benefiting from economies of scale.”
Bristol Water gets around half its supply from the Mendips, including Cheddar Reservoir and Chew Valley Lake, and around half from the River Severn.
The acquisition is subject to review by the Competition and Markets Authority with input from the Water Services Regulation Authority (Ofwat).
