Still Water

Thames Water's Farmoor Reservoir, Oxfordshire.

The acquisition by China Investment Corp., China’s sovereign wealth fund, of an 8.7% stake in Thames Water, which supplies water to 14 million consumers in southern England, may prove in time be a precursor to more Chinese investment in European infrastructure, but Beijing likes stability. What is more stable than utilities in Western markets?

Update: Our man in London points out that Beijing is a late arrival to the U.K. utilities foreign-ownership party, reminding us that Li Ka-shing’s Cheung Kong bought Northumbrian Water last year, while Bristol Water was bought by a Canadian investment company. Thames Water itself is owned by Kemble Water, a consortium of investors led by the Australian infrastructure investment bank Macquarie, which bought it from the German group RWE for a cut-price £8 billion in 2006.

Though the price CIC paid for its Thames Water stake was not disclosed, the likely figure is of the order of $1 billion, which won’t make much of a dent in its $410 billion coffers.


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