American Water to exchange assets with Aqua America

American Water Works Co. (Voorhees, NJ) and Aqua America, Inc. (Bryn Mawr, PA) have entered into a pair of agreements under which they will effectively exchange assets in Missouri and Texas. Under one of the agreements, American Water will acquire Aqua America’s regulated water and wastewater system assets in Missouri for approximately $3 million. The assets to be acquired consist of 11 water systems and 59 wastewater systems. In the other agreement, American Water will sell its regulated assets in Texas, consisting of 5 wastewater systems and 51 water systems, to Aqua America for approximately $6 million. The two companies characterized the agreements as a way to strengthen operations in their respective states, creating better economies of scale and providing additional opportunities for both companies to continue delivering high-quality local customer service. Commenting on the deals, Aqua America Chairman and CEO Nicholas DeBenedictis said “we are strategically planning and executing our growth efforts in the right states like Texas, which is one of the fastest-growing states in the nation and where we have critical mass. Likewise, we are pruning our assets in areas where we cannot achieve or maintain maximum economies of scale, or which require investments that cannot be supported by the existing or potential customer base.” Jeff Sterba, president and CEO of American Water, said that “by adding smaller systems into more robust, existing operations, we are able to leverage the expertise and strength of large-scale operations, benefiting customers in Texas and Missouri.”