Pennon Group Acquires Bristol Water

Pennon Group plc (Pennon or the Group) is pleased to announce that it has acquired 100% of the issued share capital of Bristol Water Holdings UK Limited and its subsidiaries, including Bristol Water plc (Bristol Water), (together, the Bristol Water Group), from its indirect shareholders: infrastructure funds advised by iCON Infrastructure LLP (80% of the shares); and ITOCHU Corporation (20%) for an equity value of £425 million, and an enterprise value of £8141 million including assumed debt (the Acquisition). Pennon is also announcing a return of capital to shareholders, consisting of a Special Dividend of c.£1.5 billion, and a share buy-back programme of up to £0.4 billion.


  • Acquisition of the Bristol Water Group for £425 million cash consideration, adding a high-quality business with approximately 1.2 million customers
  • Acquisition is expected to be earnings accretive and will result in an increase of c.16% in the Group regulatory capital value (RCV) as at 31 March 2021
  • The acquisition price equates to a premium to RCV of 44%2
  • Proposed c.£1.5 billion special dividend and share consolidation, and a proposed share buyback programme of up to £0.4 billion
    Following the Acquisition and the return of capital to shareholders, the Group is targeting net debt to RCV gearing of below 65% by the end of K73
  • The Board has decided to increase the Group’s dividend level by c.9% (equivalent to an increase of 2 pence per share on a pre-consolidation basis) from 2021/22 onwards, and to continue its sector-leading dividend policy of CPIH + 2% growth.

Commenting on the Acquisition, Susan Davy, Group Chief Executive said:

The acquisition of Bristol Water brings great people and a great business to Pennon and I am hugely excited about building a future together. We see attractive opportunities to continue to invest in the Bristol Water business to deliver enhanced resilience and water security to benefit customers in Bristol and beyond. This latest acquisition, building on a strong heritage and history, firmly cements Pennon as one of the leading UK water and waste water companies.

Additionally, we have demonstrated our credentials as a responsible business, reducing debt levels, increasing pension contributions, and further supporting the Green Recovery for the much-needed regeneration of our region.

Pennon is also proposing an on-market share buy-back programme of up to £0.4 billion expected to be conducted through to September 2022, noting that this may be reconsidered if other attractive growth opportunities are identified. We are also pleased to be recognising shareholder support through the return of c.£1.5 billion to shareholders in the form of a special dividend.

Our sector-leading dividend policy, which we have strengthened today, together with the proposed special dividend, recognises the ongoing loyalty of our shareholders, underpinned by the Group’s confidence in our ongoing growth strategy, and building a sustainable future for all.

The full Press Release can be accessed here