Ofwat has published a statement of intent setting out the working arrangements between itself and the Competition and Markets Authority (CMA) in relation to the review of mergers involving water companies in England and Wales.

Introducing the paper, Ofwat said the working arrangements set out in the statement of intent are not legally binding. The statement is restricted to Ofwat’s role in giving an opinion to the CMA in phase 1 assessments of mergers between water enterprises and does not consider any competition issues resulting from the mergers that the CMA may also be investigating under the Enterprise Act 2002.

The statement also sets out the general principles Ofwat and the CMA will observe, including:

• The decision as to whether the CMA refers a water merger for a phase 2 investigation is for the CMA alone.
• The views that Ofwat presents in its opinion will be its own, independent of the CMA.
• Ofwat’s opinion is not binding on the CMA, but the CMA will give significant weight to it when making decisions in relation to prejudice to Ofwat’s ability to make comparisons.

The statement also says that the CMA will not commence a merger review until it considers that the merger parties have provided sufficient information required for the respective assessments of both Ofwat and the CMA.

Click here to download Ofwat’s Statement of Intent in full