CMA approves £2.5bn merger of Deeside based Redrow and Barratt

The Competition and Markets Authority (CMA) has given its approval to Barratt Developments’ £2.5bn acquisition of Deeside based Redrow after the two companies took steps to address concerns over local competition.

The regulator initially flagged a potential issue in areas where both firms had developments in close proximity, particularly a Barratt site in Whitchurch, Shropshire, and Redrow’s nearby 324-home project in Nantwich, Cheshire.

The CMA found that the deal could lead to a “substantial lessening of competition” (SLC) in those local markets, but accepted measures proposed by Barratt and Redrow to prevent this outcome.

To satisfy the CMA’s concerns, both companies agreed to appoint Savills, a third-party agent, to manage the sale of unsold homes at Redrow’s Nantwich site.

This step was designed to ensure fair competition remained in the area and to prevent any adverse effects from the merger on the local housing market.

With these undertakings in place, the merger will now proceed without the need for a more extensive phase 2 investigation by the CMA.

The combined entity, named Barratt Redrow, is expected to deliver around 23,000 homes annually and generate revenues exceeding £7bn.

Trading in the company’s shares will commence on the London Stock Exchange this week, following the delisting of Redrow shares in late August.

David Thomas, CEO of Barratt and head of the merged company, described the day as a “significant milestone” for the newly formed Barratt Redrow.

He highlighted the potential for the combined business to “accelerate the delivery of much-needed homes across the UK” and noted that integrating the two companies would take roughly 18 months.

“By joining forces, we will be able to offer a wider range of homes and price points to our customers, keeping them at the centre of everything we do,” said Thomas. “The focus now is on integrating our operations efficiently to realise the full benefits of this merger.”

Matthew Pratt, who currently serves as Redrow’s CEO, will continue overseeing Redrow’s operations within the new group and will also join the board.

Ewloe headquartered Redrow was founded in 1974 by Steve Morgan, starting as a civil engineering firm in North Wales.

Over the decades, it grew into one of the UK’s largest housebuilders, listed on the FTSE 25