Committee publication · Correspondence · 15 July 2025
Correspondence from KKR regarding Thames Water, dated 9 July 2025
From: Environment, Food and Rural Affairs Committee
Inquiry: Reforming the water sector
Summary
KKR responds to the Environment, Food and Rural Affairs Committee's inquiry into water sector reform, addressing four questions about its involvement with Thames Water. KKR defends its equity raise process, preferred bidder status requirement, and withdrawal from the investment, stating the complexity of the turnaround and timing expectations made proceeding impractical despite developing a detailed operational plan.
Key findings
- KKR sought preferred bidder status as standard practice for complex transactions; Thames Water's board ultimately decided which approach to progress.
- KKR was aware alternative solutions were available to Thames Water throughout the process.
- KKR withdrew after months of due diligence and developing a detailed turnaround plan, citing inability to meet timing expectations for improvements and stakeholder confidence.
- KKR handed over its operational turnaround plan to Thames Water; Thames Water's management team cooperated constructively throughout.
- KKR states Thames Water ran an open market process that did not impinge on private market solutions.
Tone
ProceduralTopics
Key actors
KKR, Thames Water, Rothschild, Alistair Carmichael MP, Tara Davies, Environment, Food and Rural Affairs Committee
Notable line
“… we felt that we would not be able to manage and meet the understandable expectations on the timing of improvements, risking falling short in the eyes of the public and stakeholders.”
Key Quotes
“Our approach has always been to engage in a detailed exercise to develop an extensive due diligence review and comprehensive turnaround plan to support any investment in Thames Water.”
“It is common to ask for preferred bidder status in situations of this complexity, and we understand we were not alone in believing that this preferred bidder status was required to proceed.”
“The turnaround for Thames Water is a complex process, which would take time and with multiple important and diverse stakeholders involved.”
“Thanks to the support of the company we were able to develop a detailed turnaround plan, but we felt that we would not be able to manage and meet the understandable expectations on the timing of improvements …”
Source · parliament.uk record ↗