£2.5bn housebuilder mega-merger on track to be completed this week

Barratt’s £2.5bn takeover of Redrow Homes could be completed imminently after the companies announced this morning (August 19) that they hope to resolve these issues by the end of the week.

On August 8th, the UK’s Competition and Markets Authority (CMA) completed its first review of the merger.

It found no major competition issues across the UK but did express concerns around a Barratt development in Whitchurch, Shropshire, which includes nearby towns such as Nantwich, Ellesmere and Market Drayton.

Both housebuilders currently have a high combined share of land in the catchment area around the Barratt development at Tilstock Road, with the addition of Redrow’s development at Kingsbourne in Nantwich. If the deal goes ahead, the CMA found that it could lead to higher prices and lower quality homes for homebuyers in this catchment area.

Barratt and Redrow said in an update to the London Stock Exchange that the merger has raised competition concerns in “only one of the more than 400 local areas where the two companies overlap.”

The shareholders of Leicestershire-based Barratt and North West’s Redrow voted in May to progress the mega-deal, to create a group that turned over £7.5bn last year and will have a land pipeline of over 92,000 plots.

Barratt and Redrow are working with the CMA to resolve these concerns and avoid a more in-depth investigation.

Approval from the CMA was a condition for the merger, but Barratt has now waived this requirement and hopes the merger will proceed later this week as planned.