The £2.5bn merger between housebuilders Barratt Developments and rival Redrow (RDW.L) has been given the go ahead after the housebuilder agreed to address concerns raised by the competition regulator.
The Competition and Markets Authority (CMA) had said earlier this month that the acquisition could lead to higher prices and lower quality homes in one area — in and around Whitchurch, Shropshire.
Barratt said the watchdog had given it the green light to continue with the merger after the companies agreed to the sale of the homes in question. It added that it now expected the deal to complete within 18 months.
Anthony Codling, managing director of RBC Capital Markets, said: “It is good for Barratt, Redrow and homebuyers in general that Barratt has chosen to push ahead with its proposed merger with Redrow despite the small issue raised by the CMA.
“We view the CMA’s issue as a minor one that can be easily resolved and not an issue big enough to stand in the way of the planned combination of Barratt and Redrow.
“The sooner the merger is completed the sooner homebuyers can benefit from a larger choice of homes offered for sale by the newly formed combined group.”
