The UK’s Competition and Markets Authority (CMA) has approved Barratt Developments‘ £2.5bn ($3.27bn) acquisition of Redrow.
This decision follows a period of consultation on undertakings proposed by the companies to address the CMA’s concerns, thereby avoiding a more in-depth phase two investigation.
The boards of Barratt Developments and Redrow reached an agreement on a merger in February 2024.
The CMA initially expressed concerns that the merger could impact new home prices in the Whitchurch area of Shropshire and surrounding towns, due to the high combined share of land held by both housebuilders.
The CMA’s apprehensions centred on the land around the Barratt development at Tilstock Road and Redrow’s Kingsbourne development in Nantwich.
Following the approval, Barratt has engaged Savills as an independent third-party agent to oversee the completion of the Kingsbourne development.
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By GlobalDataThe CMA has given its assent to this arrangement.
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.”
With the CMA’s clearance now secured, the initial enforcement order related to the merger no longer applies. Barratt is set to begin integrating the operations of both companies.
Barratt has confirmed its plans to complete the integration plan within 18 months from the completion date of 21 August 2024.
The company anticipates that synergies from the merger will be fully realised within three years of completion.
In August, the CMA had indicated that it might accept the measures proposed by Barratt Developments and Redrow, paving the way for finalising their merger agreement.
