Lyonnaise des Eaux SA and Northumbrian Water Group Plc

Monopolies and Mergers Commission report into the acquisition by Lyonnaise des Eaux (now known as Ondeo or Suez Environment) of Northumbrian Water. Lyonnaise already owned North East Water.

The Commission found that the merger "would prejudice [Ofwat's] ability to make comparisons between different water enterprises".

As the transaction was subject to EC merger control, only certain purposes could be considered in setting remedies; the Competition Commission thought that "the principal other purpose we were able to consider was the achievement of efficiency savings resulting from the merger".

The Competition Commission found that "further material efficiency savings cannot be achieved in the absence of the merger". The merger was allowed subject to reductions in price limits because it would "create a new and improved comparator capable of providing sufficient stimulus to the industry and to provide immediate benefits to the consumer".

See Water mergers for background and other cases.

For further information or advice please contact Franck Latrémolière.

Filed under Competition Commission, Merger control, Price controls, Water.

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