Macquarie turns off tap, selling out of Thames Water

Macquarie Group has ended a decade-long connection with Britain-based Thames Water, selling its final stake.

Macquarie Group has other fish to fry. Picture: AFP.

Local investment bank Macquarie Group has ended a decade-long connection with Britain-based Thames Water, selling its final stake yesterday as it recalibrates its British portfolio.

British media reports suggest the company hived off its remaining 26 per cent in Britain’s largest water services provider for about £1.3 billion ($2.09bn), although the price was not formally disclosed.

Thames Water serves 15 million customers across London, the Thames Valley and surrounding areas, supplying about 2.6 billion litres of drinking water per day.

Macquarie’s infrastructure arm had been pursuing a divestment for the better part of a year with the aid of adviser Nomura, briefly stalling the process after last year’s Brexit vote.

It had been tipped to receive as much as £1.5bn through a sale.

Macquarie’s decision to offload the holding to Canada’s Borealis Infrastructure and Kuwait’s Wren House ends a relationship with Thames Water that began when it led a consortium to claim full control for £8bn in 2006. The sale of the 26 per cent stake revealed a valuation of £5bn on exit.

It comes on the heels of Macquarie’s sale of 9.9 per cent to Abu Dhabi Investment Authority in 2011 and the divestment of 13 per cent to BT Pension Scheme in 2012, with the bank’s former 48.9 per cent holding now reduced to nothing.

Macquarie has been active in British infrastructure over the past few months, with the sale of its position in Thames Water coming after it led a consortium to buy 61 per cent of National Grid. That deal showed a valuation of £13.8bn, with Macquarie’s 14.5 per cent position worth £2bn.