Barratt's Buyout of Redrow Set to Complete

Housebuilder Barratt is poised to finalize its £2.5 billion acquisition of Redrow this week, despite warnings from the UK’s Competition and Markets Authority (CMA) regarding potential local competition issues. The CMA has expressed concerns that the merger could result in increased prices and reduced quality of homes in Whitchurch, Shropshire, although it did not identify any national-level issues. In response, Barratt has decided to temporarily set aside these concerns to proceed with the buyout. Barratt emphasized that Whitchurch is just one of over 400 areas where the two companies overlap, and both firms are actively working on solutions to address the CMA's limited concerns. The company aims to prevent further investigation and secure regulatory approval for the merger. A court hearing is scheduled for Wednesday, which is a crucial step in completing the acquisition and alleviating uncertainty for employees and stakeholders. However, the CMA is expected to impose an enforcement order that will restrict Barratt and Redrow from integrating their operations until the regulator is satisfied that its concerns have been adequately addressed. The merger is anticipated to be fully realized within 18 months, with projected annual cost savings of at least £90 million, although it will incur a one-time restructuring cost of approximately £73 million. This restructuring may lead to a reduction of about 10% of jobs across the combined entity as overlapping roles are eliminated, highlighting the significant impact of the merger on the workforce.