Barratt-Redrow merger to complete this week as housebuilders engage with CMA

19th Aug 2024 07:07

(Sharecast News) - Barratt Developments and Redrow have reported that their impending £2.5bn merger should complete later this week despite local competition concerns raised by regulators.

Both parties are now engaging with the Competition and Markets Authority following the conclusion of its first review earlier this month, which raised concerns about the supply of new build private residential housing in one of the more than 400 local areas where the two companies overlap.

Barratt has now waived the CMA condition to the merger, which "removes uncertainty for the employees, supply chain and wider stakeholder groups of both businesses".

Barratt and Redrow said in a statement on Monday that they are continuing to engage with the CMA with the objective of agreeing "suitable undertakings" which would address the CMA's concerns "and avoid the need for a reference to a full Phase 2 investigation".

The CMA will likely enforce a so-called initial enforcement order on both parties, preventing them from integrating to the two businesses until they agree on conditions to settle the competition concerns.

"Barratt confirms that it remains its intention to begin full integration as soon as practicable and permissible. Barratt also confirms that its intention remains to substantially complete the implementation of an integration plan within 18 months of completion, with synergies expected to be realised fully within three years following completion," the companies said in a statement.