Barratt Announces Intention to Complete its £2.5bn Merger With Redrow
In a stock market announcement today, the housebuilding giant revealed that it had waived the requirement for Competition & Markets Authority (CMA) approval for the scheme, indicating its intention to finalise the deal within the next few days.
The company acknowledged ongoing discussions with the CMA to address concerns that the merger could negatively impact homebuyers in the Whitchurch, Shropshire area if reduced competition leads to higher prices or lower quality homes. Barratt anticipates that the CMA may issue an initial enforcement order to prevent further integration of the two businesses while the inquiry is underway.
Nonetheless, Barratt remains committed to completing the integration within 18 months of the merger’s finalisation this week.
Certain actions, however, will await CMA approval, such as rebranding the company as Barratt Redrow and appointing Matthew Pratt, along with non-executive directors Nicky Dulieu and Geeta Nanda, to the combined group’s board.
The merger would position Barratt, already the UK’s largest housebuilder, to increase its turnover to over £7 billion (based on 2023 figures), surpassing the £4.3 billion turnover of the second-largest builder, Taylor Wimpey, last year.
Barratt and Redrow are collaborating with the CMA to address concerns regarding the Shropshire area, seeking to agree on “suitable undertakings” to avoid a phase two investigation that could potentially block the merger.
The CMA’s concerns focus on an 11-mile radius around Whitchurch, Shropshire, which includes four Barratt developments and one Redrow development.
However, the CMA stated that it has no competition concerns about the merger on a national level, which would result in the creation of the UK’s largest housebuilder.
A Barratt spokesperson said: “This [waiving the CMA condition] removes uncertainty for the employees, supply chain and wider stakeholder groups of both businesses, and allows us to accelerate the creation of an exceptional UK homebuilder in terms of quality, service and sustainability, which in turn can accelerate the delivery of high-quality, sustainable homes and communities for customers across the UK, addressing the country’s need for homes.
