The UK’s Competition Watchdog has given its approval to the £2.5bn purchase of Redrow by UK’s largest housebuilder Barratt.
The Competition and Markets Authority announced that it accepted commitments from both companies in order to address concerns about a possible local competition issue. This means the deal won’t be referred to a more extensive phase 2 investigation.
The CMA was concerned about a Barratt project in Whitchurch, Shropshire being close to Redrow’s 324-home Nantwich development, Cheshire. It found “a realistic prospect of a SLC” (substantial lesser of competition).
Savills was appointed as an independent third party agent by the companies to oversee the sale of any remaining houses on the Redrow Nantwich development.
The combined group, now called Barratt Redrow is expected to construct about 23,000 houses a year, and generate a revenue of over £7bn. The London Stock Exchange will begin trading the shares under the new name on Monday. Redrow shares were removed from the London Stock Exchange in late August.
Barratt announced that it would start the integration of businesses. This is expected to last for a year-and-a-half.
David Thomas, the chief executive of the combined group and leader, described the day as a “significant landmark for Barratt Redrow as we become one organisation”. He claimed that the combined company would “accelerate delivery of homes needed in this country”.
He said: “Together we offer a wider range of homes and prices for our customers. We will continue to place them at the center of everything we do.” Now, our focus is to integrate our businesses as effectively and efficiently as possible in order to achieve the benefits expected of the combination.
Matthew Pratt will remain as the Redrow CEO and join the board of the larger group.
Both boards have supported the all-share agreement, as has Steve Morgan who founded Redrow in 1968 with a £5,000 credit from his father. He had worked on building sites for 50 years.
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