2005 - 2006 - Pinsent Masons Water Yearbook 2012

Companies Active In, Entering and Leaving the Sector
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PART 1: 2005-2006 OVERVIEW
In terms of corporate activity, this year has vied with 2004 as the most remarkable since the
Yearbook began both in the number of corporate changes and in the variety of these changes.
Companies that left…
Six companies left the sector over the past year, five in Italy and one in the Philippines. The
Italian water industry is currently undergoing a fundamental rationalisation, seeing various
stakes being acquired by the private sector and the municipal ATOs acquire each other in order
to generate the economies of scale needed to deliver capital project efficiency over the coming
decade. Amga has effectively completed its acquisition of Acque Potabili, Acquedotto Ferrari
Galliera and Acquedotto Nicolay, enabling it to consolidate its position as Genoa’s water and
sewerage utility and to continue developing its presence across Italy. Meanwhile ENI and ENEL
sold their water activities to Amga and Veolia in order to concentrate on their electricity and gas
activities. Benpres sold its stake in Maynilad Water back to the Government while Suez
continues to hold 14% of the concession’s equity. While Maynilad Water will be refinanced
through new equity investors in the near term, it is unlikely that Benpres will be seeking to return
to the sector for some time.
…companies that joined…
Usually when a company sells its water activities, it leaves the sector altogether. This year,
partial divestments have resulted in a number of the incumbent players carrying on in a smaller
manner and new players operating their former activities. AIG of the USA’s private equity arm
acquired Utilities Inc from Nuon, Läckeby Water Group (Sweden) acquired AWG’s Oslo
concession in Norway to build on its O&M services in Sweden, Mota-Engil (Portugal) acquired
Severn Trent’s concession holdings in Portugal and gained new concessions in its own right
and PAI (France), another private equity house, acquired SAUR (France), while Bouygues
retained some of SAUR’s activities, especially in Africa.
‘Discoveries’ of hitherto overlooked companies have been particularly fruitful in the Russian
Federation (Rosvodokanal (Alpha Eco), Novogor-Prikamye (Interros), CES – Multyenergetika,
JSC Russian Communal Investments (Bazovyi Element), Russian Utility Systems & Syzran
Vodokanal), France (Alteau, STGS, Sogedo and Ternois Epuration) and Poland (Aquarius &
Co). The publications ‘Global Water Report’ and ‘Global Water Intelligence’ continue to play a
crucial role in this respect, along with the OECD’s research programme in to eastern European
utilities.
There were three IPOs in 2005, compared with two in 2004 and 14 between 2000 and 2003. In
contrast to the Italian ATO IPOs seen during the latter period, all three IPOs this year have been
for the local operating companies of successful international concession contracts. Two (AS
Tallinna Vesi in Estonia and Manila water in the Philippines) allowed United Utilities to sell part
of its holding in these concessions, while Lydec in Morocco enabled Suez to sell part of its stake
there.
The Chinese market continues to attract new entries, whether from Singapore (Asia Water
Technology & Bio Treat) and Malaysia (Goldis), or from Hong Kong and China itself (Towngas
and Interchina Holdings respectively). On a smaller scale, this pattern is being seen in India,
where Larsen and Toubro gained a BOT contract. New entries through acquisitions were First
Islamic Bank (Bahrain), which acquired South Staffordshire Water and Sacyr (Spain), which
acquired IIG de Aguas from the Portuguese Government.
…companies that ponder…
Nuon’s appetite for the water sector looks set to ease both due to the hostility towards the
private sector being involved in water provision in its home market and due to demands on its
management as the company faces the challenges of energy utility liberalisation. Further
strategic realignment from Veolia, Suez and RWE also remains likely over the coming year and
AWG ought to complete its divestment programme.
Pinsent Masons Water Yearbook 2005-2006