KKR has been named preferred bidder to acquire a £4bn equity stake in Thames Water, as the UK’s largest water utility seeks to recapitalise and avoid nationalisation. 

The move places the US private equity firm at the centre of a high-profile turnaround deal in the UK infrastructure sector.

Thames Water, which carries nearly £20bn in debt, confirmed that it expects to finalise an agreement with KKR by the end of June, with completion targeted for the second half of the year. The company has been racing to secure fresh capital after winning court approval earlier this month for a £3bn emergency bailout from creditors to avert a collapse into temporary public ownership.

The competitive bidding process drew interest from other firms, including UK-based business water retailer Castle, Hong Kong-listed CK Infrastructure Holdings, and London’s Covalis Capital. However, KKR emerged as the frontrunner to inject much-needed equity into the utility.

The deal will involve a “material impairment” of Thames’s senior bondholder (class A) debt, the company confirmed. Discussions on other terms of the proposal are ongoing, including provisions around regulatory fines and performance-related penalties—key concerns for all bidders.

Thames Water, which serves 16 million people across London and south-east England, stated it remains focused on delivering a market-led solution that is “in the best interests of customers, UK taxpayers and the wider economy.”

The transaction marks another major UK infrastructure play for KKR, whose reputation for large-scale, high-stakes deals was cemented decades ago in the book and film Barbarians at the Gate.