The Japanese have beaten China in a business battle for ownership of a significant south London utility, with trading powerhouse Sumitomo Corporation acquiring 100 per cent of East Surrey Holdings, the parent company of Sutton and East Surrey Water, for a bargain £164.5 million.
The Beijing Water Authority had been tipped by City AM to win control of Sutton and East Surrey Water (SESW), which supplies water and sewerage facilities to more than 665,000 customers in South Croydon and parts of Kent, Sussex and Surrey.
The Tokyo-based new owners are to fly-in their own management team, according to Utility Week.
“We are aiming to support the improvement of the whole business and one area of focus is reducing leakage levels,” a Sumitomo spokesman told the trade magazine.
“SESW has been bought several times over the past 20 years and it has always been by investment companies who have left us to do what we do well,” a SESW spokesman said.
Sumitomo said it would focus on building water infrastructure and SESW presented an opportunity “to realise long-term stable returns”. It had no plans to invest in other water utilities in the UK, but if the deal proved successful it may look to expand.
In 2012, SESW posted revenues of £57.1 million, up from £54.3 million the previous year. Operating profit rose by £1 million to £16 million over the same period.
SESW’s managing director Anthony Ferrar said, “We are delighted to welcome Sumitomo Corp and are looking forward to working with them to continue to achieve our objectives of delivering high-quality water, long-term security and customer service in an efficient manner.”
Sumitomo says that it has “a keen interest in developing its business water concessions, and through the acquisition of SESW, hope to become eligible for further water concession opportunities”.
Sumitomo is looking to buy in the waste water treatment and desalination sectors in the Americas, Asia, China and the Middle East.
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