Macquarie led group wins bid for Thames Water

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The deal for Thames, owned by German utility RWE AG, runs to 8 billion pounds including the assumption of 3.2 billion pounds of net debt.

The sale is part of RWE's strategy to focus on electricity and gas businesses, in common with bigger rival E.ON.

Macquarie, for its part, looks for assets exposed to limited competition, such as airports, toll roads, property and utilities, which it bundles into managed funds.

Macquarie Bank said it intended to invest about 250 million pounds to take an 11 percent stake in the winning consortium, which also includes two European infrastructure investment funds managed by a member of the Macquarie group, and other investors.

"Included in Macquarie's share price is an expectation that it will lead to a number of such deals. They need to keep the volume going," Wilson HTM analyst Brett Le Mesurier said. "This is another brick in the wall for them."

Macquarie's shares were up 1.2 percent in early trade to A$71.37 in a wider market up 0.3 percent.

Thames has been severely criticised by water regulator Ofwat for failing to stem water leaks while imposing usage restrictions on customers.

Earlier on Monday, Chris Huhne, opposition Liberal Democrat spokesman on the environment, said the 8 billion pound valuation showed the regulator was not being tough enough on the company.

Also speaking before the deal was announced, an Ofwat official said Ofwat had warned bidders it may not allow such generous price increases currently running at twice the rate of inflation in future.

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