Macquarie Asset Management has reached an agreement to acquire a majority stake in Southern Water Services Limited, which provides essential services to 2.6 million water and 4.7 million wastewater customers across Kent, Sussex, Hampshire, and the Isle of Wight.

Under the agreement reached with Southern Water’s existing shareholders, Macquarie Asset Management will invest on behalf of long-term investors, including pension funds and insurance companies, over GBP1 billion (US$1.34 billion) in new equity to recapitalize the business and implement a more sustainable financing strategy for Southern Water.

The capital injection will allow Southern Water to make a significant investment in upgrading its network with GBP2 billion (US$1.72 billion) to be invested over the next four years of the current regulatory period to fix pipes, pumping stations, and sewers.