Kelda stages 'retreat with honour' from US market

The company is selling its US water business, Aquarion, to the acquisitive Australian investment bank Macquarie for no more than it paid six years ago. Acquarion, which distributes water to 677,000 Americans, mainly in Connecticut, fetched $860m (£491m) including $235m of debt.

The latest withdrawal follows a disastrous trans-Atlantic foray by Scottish Power, whose decision to sell Pacificorp cost the energy generator almost £1bn and its chief executive, Ian Russell, his job.

Severn Trent and Anglian Water have also struggled to make successes of ambitious overseas acquisitions.

Kelda's chief executive, Kevin Whiteman, insisted that Aquarion had paid off over the past six years and that its sale left no egg on his face. "It is a retreat from the US market, but it is a retreat with honour because we have not lost any money," he said. "We regard it as a success to get out of the US without losing money."

Experts reckoned that Acquarion has been a disappointment. In 2004, soggy profits were blamed on unusually heavy rainfall in north-east America, which meant that householders in New England, New York and Connecticut needed to water their lawns less. Kelda bought Acquarion in 1999 to ride an expected wave of consolidation across the US.

However, Mr Whiteman decided to sell the business because Kelda did not have the cash to build its American operations by further acquisition. With commodity prices soaring, American utilities are commanding hefty premiums. He said: "Scale is one of the issues for us. We are a small player over there without the necessary firepower."

Macquarie, an infrastructure specialist, already owns three US utilities as well as toll roads, car parks and businesses servicing several airports.

Over here, Macquarie owns the M6 toll road, and has sizeable stakes in South East Water and Bristol and Birmingham airports, among other investments.

Earlier this week, it surrendered ambitions to buy the London Stock Exchange after failing to agree a price at which major shareholders were happy to sell.

Greg Ward, Macquarie's chief financial officer, said: "The Aquarion business has appealing investment fundamentals. The company has a sound reputation and capable management."

The City applauded the sale price, and Kelda shares advanced 20.5 to 808.5p. In December, the company unveiled annual pre-tax profits 20 per cent higher at £19.6m but said that margins were under pressure.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
musicHow female vocalists are now writing their own hits
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam