Barratt to waive CMA approval condition as it engages with regulator over local competition concerns
Barratt has announced that it intends to complete its 拢2.5bn merger with Redrow this week.
The housebuilding giant, in a stock market announcement today, said it had waived a condition of Competition & Markets Authority approval for the scheme in its conditions and intends to complete the deal in the next few days,
It said however it is engaging with the CMA to address its concerns that the deal might disadvantage homebuyers in an area around Whitchurch, Shropshire, if a resulting loss of competition leads to higher house prices or lower quality homes.
A Barratt spokesperson said: 鈥淭his [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鈥檚 need for homes.鈥�
Barratt said it expects the CMA to impose an initial enforcement order preventing further integration of the two businesses to prevent prejudicing its inquiry.
However, Barratt said it still intends to complete its integration plan within 18 months of the merger completing this week.
It said however that some actions will await the approval of the CMA, including changing the name of the company to Barratt Redrow, appointing Matthew Pratt to the combined group board along with non-executive directors Nicky Dulieu and Geeta Nanda.
>>See also: Barratt鈥檚 acquisition of Redrow: the numbers and key players
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The merger deal would mean Barratt, already UK鈥檚 largest housebuilder, increasing its turnover to more than 拢7bn (based on 2023 figures), compared with the 拢4.3bn turnover posted by second biggest builder Taylor Wimpey last year.
Barratt said that it and Redrow are working with the CMA to address the regulator鈥檚 concerns about the Shropshire area. The housebuilders say they want to agree 鈥渟uitable undertakings鈥� to prevent the CMA launching a phase two investigation which could halt the merger.
The CMA鈥檚 concerns are centred on an 11-mile area around Whitchurch, Shropshire, which contains four Barratt developments and a Redrow development.
The CMA however said it has no competition concerns about the merger, which would create the largest housebuilder in the UK, on a national level.
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