Pennon Group Braves U.K. Market Turbulence

9 Feb 2024
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On 10 January 2024, Pennon Group—an LSE-listed company active in the English water & wastewater utility and retail markets—announced it had completed the 100% acquisition of Sutton and East Surrey Water (SES) and other ancillary businesses for £89 million (US$113.3 million) from Sumitomo Corporation and Osaka Gas. The deal, subject to a competition authority review, values SES at £380 million (US$483.7 million).

In this Research Note:

  • Pennon Group poised to leverage SES digital capabilities
  • Public backlash and regulatory scrutiny pressure Pennon to improve operations
  • Utility sector financial health a key concern as debt accumulation finances dividends
  • AMP8 requires a new utility financing model, but near-term change is unlikely until the regulator gains teeth

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