Sep. 30, 2013
Osaka Gas Co., Ltd.
Share Purchase Concluded for UK Water Supply and Distribution Holding Company
Osaka Gas Co., Ltd. (Hiroshi Ozaki, President; hereinafter, “Osaka Gas”), and Sumitomo Corporation (Kuniharu Nakamura, President; hereinafter, “Sumitomo Corporation”) have agreed on the acquisition by Osaka Gas UK Ltd. (Toru Uda, President ; hereinafter, “OGUK”), a UK subsidiary of Osaka Gas, of 50% of the shares of Summit Water UK Limited (hereinafter, “SWUK”), a holding company of the UK water supply and distribution company, Sutton and East Surrey Water plc (hereinafter, “SESW”), wholly owned by Sumitomo Corporation(*1), and signed a share purchase agreement (hereafter, “the Agreement”) today to this effect. The Agreement will make the Osaka Gas Group Japan’s first urban gas utility company to be involved in a water supply business overseas.
Implementation of the Agreement will make SWUK a joint venture company in which the Osaka Gas Group and Sumitomo Corporation will each hold a 50% share, and accordingly, SWUK will be renamed Sumisho Osaka Gas Water UK Limited.
SESW is a water supply company, established in 1862, which supplies water to approximately 280,000 households/businesses (approximately 670,000 people) in the area south-east of London. SESW is engaged in the complete range of water concession services, including the maintenance and operation of water treatment plants, pipelines and other business assets, capital investment and customer services such as billing and cash collection.
The Osaka Gas Group is aiming to develop as a global energy/environmental corporate group via its long-term business vision/medium-term business plan “Field of Dreams 2020”.
Sumitomo Corporation invested in SESW in February of this year, and has since dispatched personnel to SESW in order to accumulate knowledge and know-how in the water supply business.
Osaka Gas and Sumitomo Corporation seek to match Osaka Gas’s knowledge and know-how in the public utility business with Sumitomo Corporation’s various experiences in the water and sewage fields, to enhance SESW’s business to further strengthen its corporate value. Osaka Gas plans to reinforce its business structure by newly positioning the water sector within its environmental and non-energy business. Sumitomo Corporation is striving to develop its water business into a more global and comprehensive sector by complementing its record of performance in BOOT/BOO(*2) businesses, such as water and sewage treatment and seawater desalination, in the Americas, the Middle East, China, Asia and other regions, and by increasing its presence in the growing water concession business.
|(*1)||Held by Sumitomo Corporation and Sumitomo Corporation Europe Limited (Kiyoshi Sunobe, Chairman and CEO) through a subsidiary.|
|(*2)||BOOT: Build-Own-Operate-Transfer, a form of water supply investment project, is a business model whereby service is provided to national and local governments in accordance with long-term agreements, upon the expiration of which the business assets are then transferred to the customers without charge.
BOO: Build-Own-Operate, another form of water supply investment project, is similar to BOOT in being a business model whereby service is provided to national and local governments in accordance with long-term agreements, but the operating company retains ownership of the assets.
1. Agreement overview
|Profile of SWUK (holding company)|
|Location||:||Upper Thames, London (UK)|
|Profile of SESW (water supply company)|
|Scope of business||:||Water supply business|
|Supply area||:||835km2 in southeastern London (population: approx. 670,000)|
|Locations supplied||:||Approx. 280,000 (household-use: approx. 260,000; business/industrial use: approx. 17,000)|
(term ended March 2013)
|:||Sales of 58.8 million pounds (approx. 8.8 billion yen)|
2. Water supply business in the UK
The UK’s water supply business was privatized in 1989, and private capital, including foreign capital, was used to improve water supply infrastructure. At present, 12 water supply companies and 10 water and sewage companies are engaged in business under the supervision of the Water Services Regulation Authority.
3.Profiles of individual companies
|Profile of Osaka Gas Co., Ltd|
|Location||:||Hirano-machi 4-1-2, Chuo-ku, Osaka|
|Scope of business||:||city gas supply sales, etc.|
|Profile of Osaka Gas UK, Ltd.|
|Scope of business||:||surveys pertaining to energy supply business, investment, etc.|
|Shareholder composition||:||100% of shares held by Osaka Gas Co., Ltd.|
|Profile of Sumitomo Corporation|
|Location||:||Harumi 1-8-11, Chuo-ku, Tokyo
Y Wing, Harumi Island Triton Square Office Tower
|Scope of business||:||general trading company|
|Profile of Sumitomo Corporation Europe Limited|
|Scope of business||:||investment in business companies, etc.|
|Shareholder composition||:||100% of shares held by Sumitomo Corporation|
Corporate Communications Department,