An £8 billion deal has been struck by Australian banking group Macquarie to buy Thames Water.
Thames' German owner, energy group RWE, announced it was selling the water company to the Macquarie-led consortium Kemble Water Ltd.
In a statement on Monday, RWE said that its management board had agreed on the sale, which was still subject to approval by the board of directors and by competition authorities.
RWE's statement described Kemble Water as a consortium headed by Macquarie's European Infrastructure Funds. It said that including £3.2 billion in net financial obligations, the total value of the deal was £8 billion.
Macquarie said in a statement: "A consortium led by Macquarie's European Infrastructure Funds has signed a conditional agreement to acquire RWE Thames Water Holdings from RWE at an enterprise value of £8 billion."
It said the deal was conditional on RWE's supervisory board giving its approval at a meeting scheduled for the weekend of October 21 and 22.
Macquarie headed off a bid by the Qatar Investment Authority, which had been considered the favourite to buy the company.
Australian energy company Alinta and private equity group Terra Firma Capital Partners, owned by Guy Hands, were also understood to be in the running.
It had been thought that Thames Water, which has 13 million customers in London and the South East, would struggle to reach its £7 billion target price because of problems with its reputation.
The business has come under fire in recent months for its performance on leakage rates - at a time when customers faced water use restrictions.
