Water firm Severn Trent sells laboratories division after OFWAT probe

SEVERN Trent has sold its laboratories business in a deal triggered by competition concerns over the water company’s ownership.

SEVERN Trent has sold its laboratories business in a deal triggered by competition concerns over the water company’s ownership.

The business, which provides analysis and sampling services to the water, construction and waste industries, has been bought by Australia’s ALS, one of the world’s largest testing companies with more than 13,000 staff. Severn Trent Analytical Services has offices in Coventry, Runcorn and Wakefield and is one of three divisions within Severn Trent’s non-regulated services arm.

Last summer, the company offered to sell the laboratories division after a complaint to water reg- ulator Ofwat about the structural links between the water business and Severn Trent Analytical Services. The complaint said the division won contracts to supply analysis services to South Staffordshire Water and Yorkshire Water by pricing below cost. Ofwat opened a formal investigation in 2010. The business accounts for about 1.5% of revenue at Severn Trent Group, which provides water and wastewater services to 4.2 million households and businesses.

 

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