THE COMPETITION and Markets Authority (CMA) has said it is investigating Barratt Homes’ proposed £2.5bn acquisition of housebuilding rival Redrow.

The competition watchdog is investigating the merger’s potential impact on competition in the UK and is inviting comments from interested parties in advance of its formal inquiry starting.

Barratt-Redrow Merger

The two companies last month reached a merger agreement to create one “exceptional UK homebuilder”.

The move will bring together the three brands of Barratt Homes, David Wilson Homes and Redrow.

The merged group, to be called Barratt Redrow, is expected to build about 23,000 homes a year and have a turnover of more than £7bn. The combined market value is around £7.2bn.

Housebuilders Investigated

The CMA’s probe of the Barratt-Redrow deal comes as the watchdog is investigating eight big housebuilders – including Barratt and Redrow – after it found evidence they may be sharing commercially sensitive information.

After a year-long investigation, the watchdog published a report into the housebuilding sector in which it identified “there is weak competitive pressure in the market to drive high levels of quality and innovation”.

The report, which expressed “substantial concerns” about the UK housebuilding market, found some of the sector’s key operators were holding back the quantity and quality of newbuild housing, and pointed to the planning system and the limitations of speculative private development as the main reasons for too few homes being built.

>> Read more about Barratt & Redrow in the news

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