The Competition and Markets Authority (CMA) has cleared Pennon Group’s acquisition of Bristol Water in a deal worth £425 million.

The deal was initially struck in June 2021, however an investigation was launched by the CMA in December last year into whether the merger would reduce competition in the water industry and prejudice the ability of water watchdog Ofwat to make comparisons between water companies.

However, the CMA has said it will not continue with the investigation and price control measures from Pennon will be in effect immediately.

It stated: “The CMA has accepted undertakings in lieu of reference for the completed acquisition by Pennon Group plc of Bristol Water Holdings UK Limited.”

Susan Davy, Chief Executive of Pennon, owner of South West Water added: “The merger of Bristol Water with South West Water is all about bringing together the best of the best to deliver for our customers, communities and the environment in the Greater South West.

“We have a track record of delivery and are working across both businesses to deploy our proven integration strategy, which we are confident will deliver meaningful benefits for all stakeholders.

“Alongside this, we are excited to further evolve our WaterShare+ unique customer share ownership scheme, offering Bristol Water customers a greater stake and say in the business.”