Macquarie buys UK water company

FRANKFURT/LONDON - A group led by Australia's Macquarie Bank today won a battle to buy Thames Water in a deal that values the UK utility at 8 billion pounds ($14.84 billion), including debt.

Macquarie beat off rival offers from bidders such as Qatar Investment Authority, which had widely been seen as the front-runner to win the auction for Thames -- owned by German utility RWE.

RWE and Macquarie announced the much-anticipated deal in separate statements from Frankfurt and London respectively.

The German firm said Macquarie Bank, its European Infrastructure Fund and other investors had agreed to buy Thames for 8 billion pounds, including a 3.2 billion pounds of net debt.

The sale is part of its strategy to focus on electricity and gas businesses, like its bigger rival E.ON.

The price came in at the higher end of analysts' expectations of between 7 billion and 8 billion pounds.

In a statement confirming an earlier Reuters report, Macquarie said the deal was subject to the approval of the RWE supervisory board, which is due to meet at the weekend.

In November last year, RWE announced its plan to sell Thames Water and American Water by 2007. RWE has decided in favor of floating American Water in the United States.

RWE bought Thames Water for 7.1 billion euros in 2000 and in 2003 paid 4.5 billion euros for American Water.

- REUTERS