Enron to Purchase British Water Firm

Enron Corp., which began a push in May to become the world’s biggest water company, said Friday it will buy Britain’s Wessex Water for about $2.8 billion in cash and assumed debt.

“The development, ownership and operation of water infrastructure is a logical extension of Enron’s expertise developed in the worldwide energy business,” Kenneth Lay, chairman of Houston-based Enron, said in a statement.

Hood told Reuters he was confident the deal would win regulatory approval.

Governments worldwide are turning water systems over to private enterprise to cut costs, finance expansion and improve service, opening a $300-billion-a-year market.

Wessex’s know-how will give Houston-based Enron, which already has billions of dollars in international energy projects, the credibility to win water infrastructure and management contracts as well.

Enron, once just a natural gas pipeline company, has grown during the 1990s into a worldwide energy company that gets $2.9 billion in annual revenue from outside the United States.

In May, Enron put its top international executive, Rebecca Mark, in charge of creating a water business to exploit growing global demand, while naming her vice chairman of the entire company.

Wessex, the smallest and most efficient of Britain’s 10 water and sewerage companies, will be the first taken over by a U.S. company. It provides water to 1.1 million people and waste-water services to 2.5 million.

Wessex, with annual revenue of about $434 million, will form the centerpiece of a new, still-unnamed international company, wholly owned by Enron and with Mark as its chief executive.

Enron stock closed down $1.25 to $55.25 on the NYSE.