CMA finds one local competition concern in Barratt/Redrow deal

Barratt and Redrow’s intended merger raises competition issues in one local area where the two housebuilders overlap, according to the Competition and Markets Authority (CMA).

The CMA’s Phase 1 investigation into the planned £2.5 billion acquisition of Redrow by Barratt has highlighted concerns in Whitchurch, Shropshire, an 11-mile area. Here, there are four Barratt developments and one Redrow scheme; CMA said that if the deal went ahead, “it could lead to higher prices and lower quality homes for homebuyers in this catchment area”.

It noted that both housebuilders held a “high combined share of land” in the catchment area centred around the Barratt development at Tilstock Road, with the addition of Redrow’s scheme at Kingsbourne, Nantwich.

But CMA found that once the merger was complete, the combined businesses would still encounter competition nationally and in all other overlapping areas. This would also include activity from large and smaller regional housebuilders, “with additional constraints coming from homes sold via the second-hand market”.

Barratt and Redrow now have until August 15 to “offer undertakings” to the CMA to address the organisation’s “limited” concerns and avoid a Phase 2 investigation – a more in-depth exercise.

The two housebuilders said they …