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The UK Competition & Markets Authority on Thursday said Barratt Developments PLC’s planned acquisition of fellow housebuilder Redrow PLC raises competition concerns in one local area.
Barratt in February agreed an all-share takeover offer for its smaller peer Redrow, valuing the latter at £2.52 billion.
Barratt shares fell 2.1% to 510.00 pence each on Thursday morning in London, giving it a market capitalisation of £5.00 billion, while Redrow shares were 2.0% lower at 721.50p each, with a market cap of £2.39 billion.
The CMA on Thursday said it has found concerns about the Redrow merger in the area around a Barratt project in Whitchurch.
Notably, the watchdog said the Barratt and Redrow merger does not raise UK-wide competition concerns.
Barratt and Redrow have until next Thursday to address the concerns by the CMA.
Barratt Chief Executive Officer David Thomas said: ‘We are pleased that the CMA has found there would be no harm to competition in all but one of the areas in which Barratt and Redrow overlap.’
Redrow CEO Matthew Pratt said: ‘Barratt and Redrow are two leading housebuilders, with strong reputations for quality, service and sustainability that have been decades in the making. Once the CMA process has completed, we are looking forward to our future as one team, accelerating the delivery of high-quality homes that the country so urgently needs.’
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