The UK’s competition watchdog is investigating the planned £2.52bn merger of homebuilders Barratt and Redrow.
This morning (Friday 15 March), the Competition and Markets Authority (CMA) announced that it is considering whether the merger would “result in a substantial lessening of competition”.
As an initial step, the CMA added that interested parties should submit comments by 2 April on the impact that the transaction could have on competition in the UK.
“This invitation to comment is the first part of the CMA’s information-gathering process, in advance of the CMA’s formal investigation starting,” it noted.
The planned all-share takeover of Redrow would see Barratt strengthen its position as the biggest homebuilder in the UK. The proposed deal between the two publicly listed companies was announced on 7 February but still requires regulatory and shareholder approval.
Construction News approached Barratt and Redrow for comment.
Barratt, Redrow and six other homebuilders are already the subject of a CMA probe – announced on 26 February – into “suspected anti-competitive conduct by housebuilders” relating to “concerns that they may have exchanged competitively sensitive information”, including non-public information on sales prices, incentives and rates of sale.
That investigation was announced on the same day that the CMA released the results of a year-long study into competition in the homebuilding sector, in which it raised “fundamental concerns” over planning and market structures.
The news of a CMA investigation into the Barratt-Redrow merger did not affect either firm’s share price. Barratt’s share price rose by 0.1 per cent during Friday morning trading, while Redrow’s increased by 0.45 per cent.
