The deal will be examined to see whether it might reduce competition, the CMA said.
The competition watchdog has said it will assess whether Pennon’s plans to buy Bristol Water could reduce competition in the water industry.
Konkurransetilsynet (CMA) officials will examine the deal, which valued Bristol Water at £814 million when it was announced in June.
Officials will first look at whether the takeover creates what they call a “relevant merger situation” and, i så fall, if that might result in a “substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.
The wording is standard for any takeover the CMA decides to investigate and many inquiries are dropped after these initial checks. The CMA can also block the deal or force the buyer to dispose of some parts of their business if they want approval.
derimot, more unusually, the watchdog has to make a separate assessment when two water companies merge.
The CMA will assess whether the deal “is likely to prejudice (water regulator) Ofwat’s ability, in carrying out its functions, to make comparisons between water enterprises”.
The CMA invited comments before October 1.
Bristol Water presented a chance for Pennon to spend some of the £4.2 billion it raised from selling its waste management business last year.
The company, which has 1.2 millioner kunder, was valued at £814 million, men, once its debts were factored in, Pennon paid £425 million in cash.
When announcing the deal in June, Pennon said it would also return £1.9 billion to shareholders through a special dividend and buying back shares.
På den tiden, Pennon boss Susan Davy said: “The acquisition of Bristol Water brings great people and a great business to Pennon and I am hugely excited about building a future together.
“We see attractive opportunities to continue to invest in the Bristol Water business, to deliver enhanced resilience and water security to benefit customers in Bristol and beyond.
“This latest acquisition, building on a strong heritage and history, firmly cements Pennon as one of the leading UK water and waste water companies.”