Barratt intends to complete its merger with Redrow this week despite concerns raised by the CMA.
In a stock market announcement, Barratt said that it had waived a condition of the CMA’s approval and will push ahead with the £2.5billion takeover of its rival.
The CMA found just one area of concern in its investigation of the proposed deal relating to an area around Whitchurch in Shropshire which the watchdog said could lead to homebuyers being disadvantaged. Barratt said that it was engaging with the CMA to address these concerns.
CMA raises competition concerns over Barratt Redrow deal
A spokesperson for Barratt said: “This [waiving the CMA condition] removes uncertainty for the employees, supply chain and wider stakeholder groups of both businesses, and allows us to accelerate the creation of an exceptional UK homebuilder in terms of quality, service and sustainability, which in turn can accelerate the delivery of high-quality, sustainable homes and communities for customers across the UK, addressing the country’s need for homes.”
The housebuilder will now look to receive court sign off for the deal on Tuesday, which, if granted, would see the suspension of trading in Redrow shares on Thursday and new Barratt shares being issued by Friday.
CMA rules, however, mean that the full integration of both businesses cannot be completed until its conditions are met, which includes the changing of the name to Barratt Redrow and the appointment of Matthew Pratt to the combined group board.
The CMA’s concerns over the deal are linked to an 11-mile area in Whitchurch, Shropshire, containing four Barratt developments and one Redrow development. The watchdog found that both housebuilders holding substantial amounts of land in the area could result in housebuyers facing high prices or lower-quality homes in the area. This was the only issue raised in the investigation with the CMA having no concerns about the deal on a national level.
Source: Showhouse
