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£2.5bn Barratt/Redrow merger cleared by CMA

The Competition and Markets Authority has cleared Barratt’s £2.5bn takeover of rival housebuilder Redrow.

The formal investigation, launched in June, has cleared the housebuilders by stating the merger meets the requirements of section 96(2) of the Enterprise Act 2002.  

The deal will see Barratt take over the entire share capital of its rival for £2.52bn, at a premium of approximately 27.2%.

Following completion, Redrow shareholders will hold around a third of the combined group, to be called Barratt Redrow, with Barratt shareholders holding the remaining two-thirds.

Redrow chief executive Matthew Pratt will be appointed to the board of the combined group, with Redrow non-executive directors Geeta Nanda and Nicky Dulieu taking up similar roles at the combined group.

The merger will create a £7bn housing giant, which Barratt believes will deliver cost savings of more than £90m. Following the merger, the pair expect to deliver some 22,000 homes a year.

However, the two housebuilders are still being investigated by the CMA regarding a separate investigation into eight major housebuilders – Barratt, Redrow, Bellway, Berkeley, Bloor Homes, Persimmon, Taylor Wimpey and Vistry – regarding the companies allegedly “sharing commercially sensitive information” with their rivals. 

Image from Redrow

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