MUFJ buys into South Staffs for Japan market edge

Published July 5th, 2018

Mitsubishi UFJ Lease & Finance (MUL), an infrastructure investor which is part of the Mitsubishi Group’s banking arm, has agreed to acquire an effective 19.9% stake in South Staffordshire plc from Arjun Infrastructure Partners.

South Staffordshire, which turns over close to £250 million per year serving 1.6 million people in central England, was 75% owned by private equity firm KKR until yesterday, when Arjun took control. Following the MUL deal, Arjun will hold 55.1%, while Mitsubishi Corporation (which also has a stake in MUL) already owns 25% of the company directly.

MUL intends to “leverage its experience and know-how” from this investment to take advantage of the “momentum of privatizations” in the Japanese water industry, the company said in a statement. It has taken part in some of the pathfinder water sector PPPs in Japan, and is anticipating wider concessions, which will be supported by legislative changes currently in parliament.