By Ian Walker
The U.K. Competition and Markets Authority said Friday that it won't refer Pennon Group PLC's acquisition of Bristol Water Holdings UK Ltd. for a further review under the Enterprise Act 2002.
However, the regulator said that it is still considering whether to refer the deal for a phase 2 investigation under the Water Industry Act 1991.
The CMA said last month that it was investigating the deal to see if it will affect the U.K. water regulator's ability to make comparisons within the industry.
The regulator said at the time that it was considering whether the merger of two or more water enterprises has taken place and, if so, whether this will prejudice Ofwat's ability to make comparisons between water enterprises. The CMA has a deadline of Dec. 22 for its phase 1 decision.
The regulator launched its investigation under the Enterprise Act in September as it believed the deal could lead to a lessening of competition. It said Friday that based on information currently available it won't refer the merger for a further review.
Pennon disclosed the deal for Bristol Water in June, purchasing the company for an equity value of 425 million pounds ($583.8 million) and an enterprise value of GBP814 million, including assumed debt.
Write to Ian Walker at ian.walker@wsj.com