The CMA has given the green light for Barratt and Redrow’s merger after accepting the housebuilders’ proposals concerning a local competition issue.
By accepting the developers’ “undertakings”, the CMA will not conduct a detailed phase 2 investigation into the planned £2.5billion deal which would see Barratt acquire Redrow.
In its initial investigation, the CMA had raised concern over an 11-mile area around Whitchurch in Shropshire, where there are currently four Barratt developments and one of Redrow’s, which the CMA said could result in a potential competition issue.
In August, the authority said that this could lead to lower-quality homes and higher prices for buyers in the area if the deal went ahead. As a result, both developers said that the conduct of any future sales and build on the Redrow development would be addressed.
The CMA today said that the proposal from the housebuilders was “clear-cut and appropriate to remedy, mitigate or prevent the competition concerns identified”. By giving clearance, the CMA’s initial enforcement order (IEO), which prevented further integration of the business, no longer applies.
As a result of this, the integration can continue, which will see the combined business renamed to Barratt Redrow and Matthew Pratt appointed to the board of the merged group.
Barratt CEO, David Thomas, said: “Today is a significant milestone for Barratt Redrow, as we come together as one organisation. With this combination, we have created an exceptional housebuilder in terms of quality, service and sustainability, able to accelerate the delivery of the homes this country needs.”
“Together, we offer a broader range of homes and price points for our customers who we will continue to put at the heart of everything we do. Our focus now is on integrating our businesses as efficiently and effectively as we can to deliver the expected benefits of the combination.
“We will leverage the best of both companies to deliver significant benefits to our people, our customers and our supply chain partners, and ensuring that Barratt Redrow is set up to deliver long-term value to all of its stakeholders.”
