The UK acquisitions watchdog said Pennon Group PLC (LSE:PNN, OTC:PEGRY)’s takeover of Bristol Water might be accepted, based on certain conditions.
Just before Christmas, the Competition and Markets Authority (CMA) stated that the deal may impede The Water Services Regulation Authority’s ability to carry out its function in making comparisons between water enterprises.
As a result, the FTSE 250 company, which had originally agreed the deal on 3 June with Bristol Water, offered undertakings on 31 December to the CMA.
The CMA said today that there may be “reasonable grounds” to believe the proposed undertakings might remedy the issue originally identified and therefore avoid a deeper ‘phase 2’ merger review.
The watchdog said it will report by 7 March on its decision whether to accept the undertaking, with the possibility to extend this timeframe to 5 May 2022 if it considers there are special reasons for doing so.
Shares have remained steady in Pennon, currently trading at 1104p.