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Southern Water has been sold by the Royal Bank of Scotland (RBS), to a consortium led by JP Morgan.

Under the deal, which values the water firm at £4.2 billion, JP Morgan Asset Management has secured a 32 per cent stake in the company.

Reports suggest that the consortium offer beat off competition from rival bidders, including the investment banks Goldman Sachs and Morgan Stanley.

Confirming the deal today, one of JP Morgan's consortium partners said Southern Water's new owners included seven Australasian superannuation funds who between them have agreed to purchase an 18 per cent stake in the utilities firm.

The Sydney-based Challenger Infrastructure Fund (CIF) also confirmed that it had decided to buy a 27 per cent stake in Southern Water, with other investors including UBS, Hermes and the Consensus Business Group.

CIF chief executive Steve Bickerton said Southern Water offered "significant growth opportunities".

"It is a high quality asset that generates long-term sustainable cash flows whilst also offering an attractive growth profile through the ongoing delivery of its extensive forecast capital expenditure programme," he explained.

Southern Water, which provides water and wastewater treatment services in the south-east, delivers water to around 2.3 million people and sewerage services to around 4.3 million.

A spokesman for RBS confirmed that Southern Water had been sold, with the bank having announced earlier this year that it was putting the utilities company up for sale.

Yesterday the bank confirmed that it had won enough support from ABN Amro shareholders to buy the Dutch bank. RBS, which made a €71 billion (£49 billion) offer for ABN along with Belgian-Dutch group Fortis and Spain's Santander, said around 86 per cent of investors had backed the bid.

RBS said the consortium would announce before Friday whether the offer had been declared unconditional.