The Houston Chronicle reported yesterday that American Water CEO Donald Correll wants to see his company be an “aquirer.” American Water is the parent company of Illinois American Water, which serves Peoria. American Water’s parent company, RWE AG of Germany, will be spinning off the water works through an initial public offering next year — Correll hopes by the second quarter.

They’re certainly big enough to be an aquirer. American Water serves 18 million people and earned over $2 billion in 2005 according to the article. In contrast, the “biggest publicly traded U.S. water utility is Aqua America Inc., which has over 2.5 million customers and $496.8 million in 2005 revenue.”

[The] small pool of publicly traded U.S. water utilities makes Correll hesitant to talk about American Water’s acquisition strategy.

“We will be a consolidator,” he said. When pressed for more details, he said he feared the industry’s makeup makes it difficult not to “name names” when discussing possible deals.

[…] Looking ahead, Correll said the biggest long-term growth opportunity likely comes from partnerships with municipal systems.

Municipalities and other non-private entities control about 85 percent of the country’s water systems. Few have been willing to sell their systems, so such outsourcing deals offer the best opportunity, Correll said.

Once the IPO is complete and American Water is no longer “foreign-owned,” At-large Councilman Chuck Grayeb will have to drop the xenophobia from his perennial pro-buyout spiel. That’s a shame because, from a purely theatrical standpoint, that was the most dramatic part of his performance.