China wealth fund buys nearly 9% of Thames Water

tap running water CIC had previously said it wanted to invest in European infrastructure

Related Stories

China Investment Corporation (CIC), the country's sovereign wealth fund, has bought 8.68% of the company behind UK utility group Thames Water.

It is the fund's first major share purchase in the UK, after Chancellor George Osborne visited China this week.

Thames Water is owned by Kemble Water, a consortium of investors led by Australian bank Macquarie.

CIC was set up in 2007 to invest some of China's huge $3.18tn (£2tn) in foreign exchange reserves.

In a one-sentence statement on its website, CIC said it bought the stake through a wholly-owned subsidiary. No purchase price was disclosed.

Thames Water, acquired by Kemble in 2006, is the UK's largest water and sewerage company, serving about 14 million customers.

CIC chairman Lou Jiwei had said recently that his company was interested in investing in European and US infrastructure.

Speaking about the deal, the Chancellor said: "This is a significant step by China. It is a vote of confidence in Britain as a place to invest and do business.

"This investment is good news for both the British and Chinese economies."

Foreign investors

Mr Osborne met China's Vice-Premier Wang Qishan and the heads of CIC and the ICBC bank on Tuesday.

The chancellor also announced that Britain had agreed to work with Hong Kong to develop the City of London as a major offshore centre of trade in China's currency, the yuan.

The government has been looking at ways to support greater private sector and foreign investment in infrastructure.

Speaking to the BBC Today programme, former Trade Minister Lord Digby Jones said: "It is good news because in Britain, and the water companies know this, needs constant repairs , so more funds in to help that when it's not a drain on the public purse has to be right."

Mr Osborne's meetings in Beijing earlier this week discussed potential Chinese interest in a number of projects in the plan.

In August, Northumbrian Water agreed to a £2.4 billion takeover by a Hong Kong-based investment firm led by Asian billionaire Li Ka-shing.

In December, the Abu Dhabi Investment Authority, another huge sovereign wealth fund, bought 9.9% of Kemble for an undisclosed price.

Thames Water supplies households in London, Berkshire, Buckinghamshire, Gloucestershire, Kent, Oxfordshire, Surrey and Wiltshire.

In the last 10 years, Ferrovial of Spain has bought BAA, the operator of Heathrow and Stansted airports, Germany's RWE has acquired npower, and Australian bank Macquarie has taken control of car parks by buying NCP.

More on This Story

Related Stories

From other news sites

* May require registration or subscription

The BBC is not responsible for the content of external Internet sites

More Business stories


Features & Analysis

  • Mukesh SinghNo remorse

    Delhi bus rapist says victim shouldn't have fought back

  • Painting from Rothschild collectionDark arts Watch

    The 50-year fight to recover paintings looted by the Nazis

  • Aimen DeanI spied

    The founder member of al-Qaeda who worked for MI6

  • Blow torchTorch of hope Watch

    An ancient art form helps troubled youth pick up the pieces

Elsewhere on the BBC

  • StudentsBull market

    Employers are snapping up students with this desirable degree


  • 3D model of Christ the Redeemer statueClick Watch

    Using drones to 3D map the famous Brazilian landmark Christ the Redeemer

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.