TWO of the South East's water companies are to merge with the possible loss of some 132 jobs. South East Water will merge with Mid Kent Water.

The new company will keep the South East Water name, but will have its headquarters at the Mid Kent site in Snodland.

It will be the second largest water utility in England, supplying 2.1 million customers across Kent, Sussex, Hampshire, Berkshire and Surrey.

It is expected that 132 workers may be made redundant from the combined total of 660 staff, but there will be no redundancies until April next year.

The managing director of the new firm, Paul Butler, said: "The creation of an enlarged South East Water will enable us to deliver a cost effective, enhanced customer service.

"However, we also appreciate that for many employees the merger process has been an unsettling period, which is why we have carried out extensive consultation over the last few months.

"This includes consulting on redundancy terms for those staff affected, dealing with them sensitively and providing appropriate support."

Both companies are owned by the Hastings Diversified Utilities Fund and the Utilities Trust of Australia.

The Competition Commission ruled that the merger could proceed on condition that a one-off price reduction of £4million was made to customers’ bills in 2008/09.