Regulator to probe Barratt-Redrow merger

The UK’s competition watchdog is investigating the planned £2.52bn merger of homebuilders Barratt and Redrow.

This morning (Friday 15 March), the Competition and Markets Authority (CMA) announced that it is considering whether the merger would “result in a substantial lessening of competition”.

As an initial step, the CMA added that interested parties should submit comments by 2 April on the impact that the transaction could have on competition in the UK.

“This invitation to comment is the first part of the CMA’s information-gathering process, in advance of the CMA’s formal investigation starting,” it noted.

The planned all-share takeover of Redrow would see Barratt strengthen its position as the biggest homebuilder in the UK. The proposed deal between the two publicly listed companies was announced on 7 February but still requires regulatory and shareholder approval.

A spokesperson for Barratt said: “We are confident that the combination of Barratt and Redrow is in the best interests of customers and will accelerate the delivery of the homes this country needs.

“We look forward to working constructively with the CMA as they undertake their review.”

Construction News approached Redrow for comment.

Barratt, Redrow and six other homebuilders are already the subject of a CMA probe – announced on 26 February – into “suspected anti-competitive conduct by housebuilders” relating to “concerns that they may have exchanged competitively sensitive information”, including non-public information on sales prices, incentives and rates of sale.

That investigation was announced on the same day that the CMA released the results of a year-long study into competition in the homebuilding sector, in which it raised “fundamental concerns” over planning and market structures.

The news of a CMA investigation into the Barratt-Redrow merger did not affect either firm’s share price. Barratt’s share price rose by 0.1 per cent during Friday morning trading, while Redrow’s increased by 0.45 per cent.

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