Freshfields tops up on water work with AWG acquisition bid

Freshfields Bruckhaus Deringer has scooped its second major water deal in as many weeks, advising the Colonial First State-led consortium on its £2.2bn bid for AWG, the owner of Anglian Water.

The news comes in the wake of the discovery that the magic circle firm is also acting for private equity firm Terra Firma on the other big water deal of the moment – RWE’s disposal of Thames Water for £7bn (The Lawyer, 2 October).

Partner David Higgins is leading the Freshfields team, with finance partner Marcus Mackenzie advising on securitisation aspects. Higgins told The Lawyer that the firm was approached by the consortium following its work on two other recent utilities sector consortium bids – the sale of ABP Ports and the takeover of BAA. Freshfields advised a Goldman Sachs-led consortium on the former deal and Spanish construction group Ferrovial on the latter.

As well as Colonial, the consortium comprises Canada Pension Plan Investment Board, 3i and Industry Funds Management. Lovells, led by corporate partner Steve Bryan, is advising Industry Funds. The deal represents the largest corporate transaction for Industry Funds to date.

In addition to Freshfields, Linklaters has been handed roles on both the AWG bid and the Thames Water sale.

Linklaters is acting for its panel client AWG, with corporate partner Shane Griffin leading the team. Capital markets partner Julian Davies is advising on securitisation. The magic circle firm is also advising Goldman Sachs on the Thames Water disposal.

These recent high-profile deals show a growing interest by pension funds and private equity houses in the water sector. According to City lawyers, regulated utilities present a safe target for investors, yet promise higher yields than bonds.