Macquarie led consortium to acquire Thames Water

16 October 2006

A Consortium led by Macquarie’s European Infrastructure Funds (“Macquarie”) has today signed a conditional agreement to acquire RWE Thames Water Holdings (“Thames Water”) from RWE at an enterprise value of £8 billion.

Thames Water is the largest water and wastewater services company in the United Kingdom, providing drinking water to eight million people and sewage services to 13 million customers.  The company’s supply area covers 5,000 square miles across London and the Thames Valley, from Kent in the east to Gloucestershire in the west, and includes 20,000 miles of water mains and 40,000 miles of sewers.

The Consortium comprises Macquarie’s European Infrastructure Funds, Macquarie Bank Limited, and other investors who are committed to long-term investment in Thames Water.

After adjusting for cash and non-regulated businesses, the acquisition implies a value for the regulated water business equal to 1.20 times the regulatory capital value, comparing favourably with recent transactions in the sector.

The transaction is conditional on the approval of the RWE Supervisory Board at a meeting scheduled for the weekend of 21 and 22 October.  Following approval, Macquarie will provide further information relating to the transaction and its ambitions and plans for this important business.

Notes to Editors

Thames Water

Thames Water is the UK’s largest water and wastewater services company, with over 13 million customers across London and the South East of England.  It includes both Thames Water Utilities Limited, the regulated entity, and a number of non-regulated businesses.

Regulated Utility:

• Water and wastewater treatment
• More than 13 million waste water and 8 million water customers
• 20,000 miles of water mains and 40,000 miles of sewers
• 100 water treatment works
• 351 sewage treatment works, including the UK’s largest at Beckton, East London
• 2,800 mega litres treated and distributed each day
• Compliance with all UK and EU drinking water standards above 99.9%

Non-Regulated Businesses:

• Freehold commercial property
• Water utility outsourcing and industrial & commercial contracts
• Four-year contract to run customers services, billing and income services for Dwr Cymru (Welsh Water)
• Contract, as part of a joint venture company, to deliver the water-related capital programme for Scottish Water
• A 20% interest in Metronet (London Underground maintenance)

About Macquarie’s European Infrastructure Funds

Macquarie European Infrastructure Fund is a diversified pan-European infrastructure fund, established in April 2004. At its final closing in June 2005, MEIF had commitments of €1.5 billion from leading institutional investors. Its mandate is to invest in a portfolio of infrastructure assets located in European OECD countries. To date, it has investments in a variety of infrastructure sectors including transport, ports, ferries and utilities.

Macquarie European Infrastructure Fund II is a follow-on fund to MEIF with similar commercial terms but with a broader geographic mandate across the expanding European Union. It aims to raise total commitments of €3 - 4 billion and to assemble a diversified portfolio of eight to 15 assets. 

Both MEIF and MEIF II are managed by a member of the Macquarie Bank Group, a leading global investor and manager of infrastructure businesses.  Members of the Macquarie Bank Group manage more than £14 billion in equity invested in infrastructure around the world through a range of listed and unlisted vehicles. Infrastructure investments managed by Macquarie include assets in the transportation, water, telecommunications and energy sectors in the UK, Germany, Portugal, Italy, France, Sweden, Denmark, the Netherlands, Belgium, Canada, US, Australia, Korea, Japan and South Africa.  Macquarie aims to manage investments in infrastructure assets profitably and responsibly, and aims to responsibly develop public infrastructure assets.

About Macquarie Bank Limited

Macquarie Bank Limited is a diversified international provider of investment banking and financial services. It is listed on the Australian Stock Exchange and has a market capitalisation of approximately £7 billion.

For further information, please contact:

Karen Smith
Corporate Communications Manager
Macquarie Bank
Tel: (44) (0) 20 7065 2420