With a price tag of £367.9 million ($588.64 million) plus £206.7
million of debt, Thames Water's acquisition of the E'Town water
utility in New Jersey, isn't cheap ? but it is strategic.
The deal marks the next stage of Thames Water's carefully planned
expansion into the US water sector, a market in which operation and
management (O&M) contracts are expected to grow at a rate of at
least 20% a year.
But for a European water company to be taking a stake in the US
water sector is nothing new. The UK's Thames Water has already been
manufacturing water filtration equipment in the US for over 10
years. And Thames together with companies such as Vivendi, Suez
Lyonnais des Eaux, Severn Trent and Yorkshire Water have already
established a firm foothold in a market that they consider is on
the point of taking off. Since 1997, these companies have announced
US water acquisition deals worth more than $15 billion.
According to David Chardavoyne, president of Thames Water in the
US, the E'Town purchase is part of the company's five point plan to
expand in the US. "What this acquisition does is put Thames Water
firmly in the US market. This is a huge market in which O&M
contracts and design-build-operate (DBO) are becoming more
prevalent. We believe that there are five distinct markets which we
can participate in.? These include owning a utility, manufacturing
products, providing services, acting as a concessionaire in a DBO
or build-own-operate-transfer (Boot) project or participating in an
In essence E'Town will provide Thames Water with the spring board
to jump into...
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