Australia buys UK

The announcement yesterday that the Australian Bank, Macquarie is to buy the UK’s Thames Water utility for £8 billion may stick in the throat of UK consumers when they see the profits made by the current owner, RWE on the sale of the utility – but spare a thought for Australians who only this week received a dire warning from their own federal government over severe water shortages over the next few years.

Ironically, it seems like the Australians, fresh with huge cash receipts from vast natural resources, are funding improvements in the UK rather than their own country.

Macquarie was also the main backer of the new M6 Toll road that cuts around the  UK’s congested Birmingham motorway network. Anyone who’s been to Australia will know that its main North-South road network in the East, the Bruce Highway, is in dire need of an upgrade, being a simple two-way road for much of its course.

Macquarie will assume Thames Water’s net debt of £3.2 billion as part of the deal, which values the regulated water business at 1.20 times the regulatory asset value.

Earlier this month, Macquarie sold South East Water to Westpac, another Australian buyer, for £665 million to free itself up to bid for Thames.

Based in Reading, Thames Water supplies drinking water to 8 million people and sewerage services to 13 million customers.

The average Australian ‘bloke in the street’ will feel a naive sense of pride about the takeover, but in the cold light of the day, they will quickly realise that it will be the UK not drought stricken Australia that will benefit – after all you can’t drink money or water crops with it.