Barratt Developments and Redrow have agreed on the terms of a merger despite a warning from the Competition and Markets Authority (CMA).
Earlier this month, the regulator identified an area of “competitive concern”, but Redrow and Barratt said they would engage with the CMA and agree on a suitable solution.
The concern related to an area where the development of both Barratt and Redrow homes overlapped.
Barratt has since waived the CMA condition to the scheme, and the two firms will complete their merger this week.
An update to London Stock Exchange said: “This 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 home builder 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.”
Barratt and Redrow said the CMA was expected to impose an initial enforcement order, in accordance with standard practice, to prevent any action that could prejudice its process.
During this period, integration planning can continue, but Barratt and Redrow will be prevented from integrating the two businesses until proposed undertakings have been agreed with the CMA.
Barratt said it would begin full integration as soon as possible with the intention to complete this within 18 months, meaning the two companies could be fully merged up to three years after the acquisition is completed.
The combined group will be called Barratt Redrow.
Matthew Pratt, CEO of Redrow, will retain his role and be appointed to the board of the combined group, while Barbara Richmond will continue in her position as CFO. Richmond will also be group integration and synergies director to support the integration for at least 12 months after the merger.
Additionally, the directors of Redrow intend to maintain their current roles.
At its most recent set of results, Barratt said its pre-tax profit would be ahead of expectations, while Redrow’s half-year report showed a profit before tax of £84m, down 58% on the year before.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
