Water deal could harm regulation, says watchdog

The Pennon Group bought Sutton and East Surrey Water in a deal for £380m.A competition watchdog has said the buy-out of a South East water provider could damage the regulator's ability to compare water companies. The Competition and Markets Authority said the Pennon Group's buy-out of Sutton and East Surrey Water could undermine Ofwat's authority as water regulator. Pennon bought Sumisho Osaka Gas Water UK, including its subsidiary SES, in January for £380 million. SES supplies drinking water to south-east England, with about 845,000 customers across east Surrey, West Sussex, west Kent and south London. Joel Bamford, executive director of mergers at the CMA, said: "We're concerned that this deal could impact Ofwat's ability to make comparisons and carry out its role of regulating the water sector."

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