£2.5bn mega-merger between housebuilding giants takes a step forward
The £2.5bn deal to merge housebuilding giants Barratt and Redrow has taken a significant step forward.
The shareholders of Leicestershire-based Barratt and Redrow have voted 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.
The deal, announced in February, cane on the back of huge drops in turnover and profit at Barratt.
Revenue fell by over a third to £1.85bn for the half year to to end of 2023, while profit before tax fell by 81% to £95.2m on the back of costs associated to legacy properties.
The merger could results in 800 jobs being axed. Barratt currently employs 6,000 people and Redrow 2,300, but bid documents show that the combined company expects to reduce its workforce by about 10%.
The firms said: “This reduction is intended to come from employees and management, overlapping central and support functions and divisions affected by the rationalisation programme as a result of the combination.
“Following completion, Barratt intends to retain the best talent of Barratt and Redrow.”
Barratt currently operates 29 divisional offices, while Redrow has 12 offices nationwide.
Meanwhile, in March, the Competition and Markets Authority said that it intended to look into the merger amid fears that it might reduce competition in the industry.
The CMA has issued a preliminary ‘invitation to comment’ to allow interested parties to submit any initial views on the impact that the transaction could have on competition in the UK.
This invitation to comment is the first part of the CMA’s information-gathering process, in advance of the CMA’s formal investigation starting.
