What do China Investment Corporation (CIC) and the Abu Dhabi Investment Corporation both have in common? Well, as of this morning the sovereign wealth funds own 8.68% and 9.9%, respectively, of Thames Water in the UK.
CIC released a statement saying that the deal had been concluded and whilst not disclosing the deal value they did disclose the actual amount of the stake acquired – 8.68%. The deal coincides with a visit this week to China by George Osborne, the British Chancellor of the Exchequer, which included meeting with Lou Jiwei, who happens to be both the head of CIC and the Industrial and Commercial Bank of China.
Thames Water left the hands of UK shareholders back in 2000 when RWE, the German power company, acquired it for just over £6bn and delisted it as a result of the deal. RWE then exited the company in 2006 by selling holding company Kemble Water to a consortium comprising of Macquarie Bank Ltd, Macquarie's European Infrastructure Funds and other investors for around £8bn.
However, there were a host of interested parties also bidding at the time, including another Middle Eastern Sovereign Wealth Fund, the Qatar Investment Authority and another Chinese suitor in the form of Cheung Kong Infrastructure Holdings.
The Abu Dhabi Investment Corporation deal took place in December 2011, so it’s difficult to predict if these minority shareholdings will open the floodgates to a full disposal of Thames Water by Macquarie, as at this point in time Macquarie is not commenting on the recent deals.