Goldman team may be sole bidder for Veolia UK

Consortia including Icon Infrastructure and PSP Investissements and a team of AXA PE, Infracapital Partners and the South Korean National Pension Service are not expected to submit a binding bid next week for the £1bn of water assets.

A consortium of Goldman Sachs Infrastructure Partners, UK pension Universities Superannuation Scheme (USS) and CVC Capital Partners looks set to be the only party to put in a final bid for the UK water assets of French group Veolia Environnement.

Sources have told Infrastructure Investor that the two other consortia in the running – a pairing of Icon Infrastructure and Canadian pension PSP Investissements and a team of AXA Private Equity, Infracapital Partners and the South Korean National Pension Service – are not planning to submit binding bids next week. 

Japan’s Marubeni Corporation was rumoured to have been interested in the bid at an earlier stage, but it’s unclear how far it proceeded and whether it actually submitted an initial bid for the assets.

Veolia Environnement hired JP Morgan Chase and Deutsche Bank earlier this year to help it sell its UK water assets, which include Veolia Water Central, Veolia Water Southeast and Veolia Water East. Sources had previously said the assets could be worth upwards of £1 billion (€1.2 billion; $1.6 billion), given a regulated asset base around the £1 billion mark.

UK water assets have of late proved popular with overseas investors, especially those domiciled in Asia. 

Earlier this year, China Investment Corporation, a $410 billion sovereign-wealth fund, bought an 8.68 percent stake in Thames Water for an undisclosed sum. And last August, Hong Kong’s Cheung Kong Infrastructure spent £2.4 billion in the headline-grabbing purchase of Northumbrian Water.

The infrastructure arm of business tycoon Li Ka-shing also owns 4.75 percent of Southern Water and used to own 100 percent of Cambridge Water, which it was forced to sell after it acquired Northumbrian Water to avoid breaching UK competition law.