In February this year, the Barratt and Redrow boards reported that they had reached an agreement for an all-share offer to combine the firms, which would see Barratt acquire the entire share capital of Redrow.
Fast-forwarding to May, Barratt and Redrow said that the combination had been approved by the majority of their shareholders.
In June, the CMA recommended an investigation and has now concluded that the merger “does not raise competition issues”, barring the supply of new builds in one of the more than 400 areas where the two companies overlap.
Barratt and Redrow said that they “intend to engage with the CMA with the objective of agreeing suitable undertakings” to avoid a second investigation.
The companies said: “For the one local area where the CMA has identified a competition concern, we have identified undertakings [that] we believe will address those concerns. The local area in question is a geographic area (11-mile straight-line distance) centred around Whitchurch, Shropshire [that] contains four Barratt developments and a Redrow development that has fewer than 10 plots remaining to sell.
“The proposed undertakings will seek to address the future conduct of sales and build on the Redrow site. No land disposals are being anticipated or proposed.”
The CMA’s deadline for a decision on whether the “undertakings” are sufficient is 22 August.
David Thomas, group chief executive of Barratt, said: “We are pleased that the CMA has found there would be no harm to competition in all but one of the areas in which Barratt and Redrow overlap.
“We remain confident that the combination of Barratt and Redrow will be approved and that it is in the best interests of our customers and wider stakeholders. Together, we plan to build on our shared strengths and create an exceptional homebuilder, in terms of quality, service, and sustainability, helping to deliver the homes the country needs.”
Matthew Pratt, group chief executive of Redrow, said: “Barratt and Redrow are two leading housebuilders, with strong reputations for quality, service and sustainability that have been decades in the making. Once the CMA process has completed, we are looking forward to our future as one team, accelerating the delivery of high-quality homes that the country so urgently needs.”
