CC Report re:Proposed Merger

RNS Number:8679V
South East Water Limited
01 May 2007


        UK Competition Commission Final Report on the proposed merger of
                      South East Water and Mid Kent Water



South East Water (SEW) notes today's publication by the UK Competition
Commission of its Final Report on its proposed merger with the UK water only
company Mid Kent Water (MKW).

In its Final Report, the UK Competition Commission has confirmed its provisional
finding that the proposed merger may be expected to cause limited prejudice to
the UK economic water regulator's (Ofwat) ability to make comparisons between
water enterprises.  The Competition Commission also found that the merger could
be expected to provide substantial longer term financial benefits and service
benefits to customers.

Given the finding of limited prejudice, for the merger to proceed the UK
Competition Commission has required that a one-off price reduction of #4 million
is made by SEW and MKW as a lump sum transfer to their customers in 2008/09 and
that operating cost savings resulting from the merger are reflected in the next
price determination for 2010/11 to 2014/15.  The UK Competition Commission also
expects that Ofwat will agree the merger of the licenses of SEW and MKW in a
short time period.

Hastings Funds Management Limited (Hastings), manager of both Hastings
Diversified Utilities Fund (HDF) and Utilities Trust of Australia (UTA), has not
yet had an opportunity to fully examine the UK Competition Commission's
findings.  The Final Report will be reviewed in detail by Hastings and the
proposed remedies will be considered by Hastings and the Boards of UTA and HDF
during the month of May.  A further announcement on the Boards' decision will be
made in due course.


For further enquiries, please contact Janet Kemp on [phone].


Note to editors: should Hastings wish to appeal the Competition Commission's
findings, it must file an appeal with the Competition Appeal Tribunal no later
than 30 days from the publication of the Final Report.





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