Barratt’s £2.5bn purchase of rival house builder Redrow has been given the green light after the competition watchdog accepted measures to overcome its concerns.
The Competion Markets Authority had expressed concern over a potential competition issue in an 11-mile area in Whitchurch, Shropshire. Here, there are four Barratt developments and one Redrow scheme.
The two companies put forward measures including appointing property agents from Savills as a third party to sell the houses.
The tie-up is expected to bring cost savings of around £90m a year, with the one-off cost of making savings put at £73m.
This will prompt a restructuring of staff and offices, cutting overlapping roles, which could lead to the loss of about 10% of jobs across the combined business.
The combined business would create a mega house builder turning over £7.45bn and delivering over 22,600 homes a year, based on past performance.
David Thomas, CEO of Barratt said: “This is a significant milestone for Barratt Redrow, as we come together as one organisation. With this combination, we have created an exceptional housebuilder in terms of quality, service and sustainability, able to accelerate the delivery of the homes this country needs.
“Together, we offer a broader range of homes and price points for our customers who we will continue to put at the heart of everything we do.
“Our focus now is on integrating our businesses as efficiently and effectively as we can to deliver the expected benefits of the Combination.
“We will leverage the best of both companies to deliver significant benefits to our people, our customers and our supply chain partners, and ensuring that Barratt Redrow is set up to deliver long term value to all of its stakeholders.”
