The competition watchdog has ruled that Barratt’s £2.5bn deal to purchase rival Redrow Homes raises competition concerns in Shropshire that must be resolved to clear the way for the mega-merger
The Competition and Markets Authority said that both house builders currently hold a high combined share of land in the area centred around the Barratt development at Tilstock Road in Whitchurch with the addition of Redrow’s development at Kingsbourne in Nantwich.
It warned if the deal goes ahead, this could lead to higher prices and lower quality homes for homebuyers in this catchment area.
From a national standpoint, the CMA said there was no risk of substantial lessening of competition because the Barratt Redrow business would continue to face competition from from rivals nationally and in all other overlapping local areas.
Barratt has now been given the o opportunity to resolve the local issue to pave the way for the merger to be cleared
While this deal did not raise UK-wide competition concerns, the CMA said it was aware there may be further consolidation amongst house builders and warned the market that it was committed to carefully assessing mergers both on a national and local level.
Joel Bamford, Executive Director for Mergers at the CMA, said: “Prospective homebuyers must not be disadvantaged as a result of deals like this one – with the potential loss of competition leading to even higher house prices or lower quality homes.
“Our initial investigation found concerns specifically in one area in and around Whitchurch, the companies now have the opportunity to agree workable solutions which address our concerns rather than move to a more in-depth investigation.”
