MORE and more of Britain's essential services are being taken over by foreign concerns - which have recently mounted successful bids for electricity, water and rail companies.

Another key trend has been the expansion of domestic operators into industries where synergies are seen - ScottishPower's expected bid for Southern Water being the latest of such moves. Bus companies have been at the forefront of rail privatisation and water and electricity groups have already joined forces in the south.

ScottishPower chief executive Ian Robinson has previously emphasised the wish to expand the Glasgow-based group as a multi-utility concern.

The Government's recent decree that the two massive English electricity generators should not fall to overseas predators signals a hardening of attitude.

But the massive transfer and consolidation of ownership of privatised UK public services is continuing.

Until a few weeks ago, the electricity and water sectors had been considered a free-for-all as far as takeovers were concerned. But on April 24, President of the Board of Trade Ian Lang wrongfooted the stock market by blocking respective bids by English generators National Power and PowerGen for distributors Southern Electric and Midlands Electricity.

The following week, the Department of Trade and Industry announced it was to retain the special shares in National Power and PowerGen which keep the companies bid-proof by preventing any individual shareholder from holding more than 15% of the voting rights.

Its announcement was timely - given that Southern Company of the US was eyeing up National Power.

Southern Co has shown a great interest in Britain's privatised electricity industry - having bought South Western Electricity (Sweb) for #1100m last year.

It has not been alone. Central and South West Corp of the US paid #1600m for Seeboard in the south-east of England. And US companies General Public Utilities and CINergy Corp earlier this month announced a #1730m agreed bid for Midlands Electricity, which PowerGen was barred from purchasing.

US companies have been attracted to the UK electricity sector because they like the price-based regulatory regime.

It gives them the freedom to make and keep more profits than in their domestic environment. The US regime offers less incentive for efficiency improvements because the amount of profits which utilities can keep is capped on a rate-of-return basis.

Deregulation and restructuring of their industries at home has also pushed US utilities, keen to reduce the associated risks, towards overseas diversification. Britain, which is unusual in allowing foreign players to buy its electricity companies, is an attractive location because there are no language barriers and it offers a business environment with which the Americans feel comfortable.

Share prices in the electricity sector have come off the boil in recent weeks, reflecting a belief that the likelihood of further bids has diminished.

The recent treatment of British Gas has shown that the UK regulatory environment is not always benign.

But, with the prices of some electricity companies having recently lost more than 10%, their cheapness may make them attractive again in spite of the risks of a snap election which could see a more interventionist Labour government come to power.

Elsewhere in the electricity sector, industrial conglomerate Hanson bought Eastern Group for #2500m and ScottishPower paid #1100m for Chester-based Manweb last year.

Given that privatisation was aimed at increasing competition, there has been a remarkable amount of consolidation among the utilities. North West Water bought Norweb for #1800m last year and is now trading as United Utilities. And Welsh Water was in an #872m merger with South Wales Electricity - with that amalgamation now trading as Hyder.

Of the 12 English electricity distributors privatised in 1990, only East Midlands, London, Yorkshire, Southern and Newcastle-based Northern, which fought a bid from conglomerate Trafalgar House, remain independent.

The structure of the electricity industry in Scotland differs from that in the rest of Britain because ScottishPower and Scottish Hydro-Electric are responsible for both generation and distribution, functions which are split in the south.

Although water was privatised in England and Wales in 1989, it remains within the public sector in Scotland. Three new water boards, covering the north, east and west of Scotland, assumed the responsibility from the now-disbanded regional councils last month.

The fiasco last year, which saw Yorkshire Water forced into an emergency tankering operation, heightened public opposition to the privatisation of this vital service.

As well as merging with the electricity distributors in their respective patches, English water companies have also attracted attention from overseas.

French water group Lyonnaise des Eaux recently paid #823m for Northumbrian Water.

But rival bids by Severn Trent and Wessex Water for South West Water were last week referred to the Monopolies and Mergers Commission.

Overseas companies have also been sharing in the spoils of Britain's ongoing passenger rail privatisation process.

Already, two franchises have been let to foreign groups. Last month's award of the southern English Network SouthCentral franchise to CGEA, a subsidiary of French conglomerate Generale des Eaux, attracted criticism from Shadow Transport Secretary Clare Short.

Generale, which has invested #1000m in Britain since 1986 in water, energy management, waste management, telecommunications, health and construction, said there would be no replacement of old ``slam-door'' trains.

The flagship East Coast Main Line franchise was awarded to Bermuda-based Sea Containers, which operates the Orient Express.

Looking at the other rail franchises already awarded, bus operator National Express won Midland Main Line and Gatwick Express. Perth-based sector stablemate Stagecoach was awarded the largest of the 25 networks on offer in terms of passenger revenues, South West Trains.

FirstBus has a minority stake in Great Western Trains, which was won by a management buy-out team. London, Tilbury and Southend went to Prism Rail, a consortium of bus operators led by East Yorkshire Motor Services' managing director Godfrey Burley.

The Office of Passenger Rail Franchising hopes to award the ScotRail franchise to a private sector operator around the turn of the year.

Ownership of infrastructure company Railtrack passed into the hands of the big City institutions and private shareholders last week.

And British Energy, formed by the marriage of Scottish Nuclear and Nuclear Electric, will float on the stock market in July. The flotation has been eased by the retention of the older Magnox stations in public ownership, within the newly-created Magnox Electric. This Government agency will also be charged with the expensive task of decommissioning the likes of Hunterston A in Ayrshire.

Like the utilities sector, the privatised bus industry has undergone massive consolidation in the last few years.

FirstBus, which earlier this month announced the #110m acquisition of Strathclyde Buses' parent SB Holdings, should soon have 20% of the British market. The group, formed by the merger of Aberdeen-based GRT and Weston-super-Mare-based Badgerline, will finally overtake Stagecoach's 17% share assuming the deal gets regulatory clearance.

The telecommunications market is still dominated by British Telecom and Cable & Wireless's Mercury - although the US-inspired cable television operators which are currently tunnelling into the UK will be looking to attract customers with their parallel telephone services.

And the Government is currently considering calling time on BT and Mercury's duopoly in the UK in international telecommunications services.

BT and Cable & Wireless recently broke off merger talks for the second time. But, even if they do merge, Mercury would have to be divested.

British Gas, hammered again by the regulator this month, has been a major disappointment to investors. Its shares, floated at 135p in 1986, are currently trading at 171!sp.

The intensification of competition in the industrial and commercial gas sector hit British Gas hard in the first quarter. Its share of this market, excluding the supply of gas for power generation, has plummeted to between 27% and 30%. Other significant players include Hanson's Eastern Group and Alliance Gas, the joint venture between BP, and Norwegian groups Statoil and Norsk Hydro.

British Gas is to divide into two separately-quoted companies to split responsibility for domestic supply from exploration, production and the pipeline network. There have been rumours that it might link up with PowerGen in supplying gas and electricity to domestic customers when the markets are fully opened up to competition in 1998.