Housebuilder Barratt to buy rival Redrow for £2.5bn
By Laura Enfield | 7th February 2024
Major Gloucestershire housebuilder Barratt Developments has agreed to buy rival Redrow in a £2.5bn deal.
It said the merger would "accelerate the delivery of the homes this country needs".
Once the deal is done it will create the UK's largest housebuilder, known as Barratt Redrow.
Each Redrow shareholder will get 1.44 new Barratt shares for each Redrow share and will hold almost a third of the new company with Barratt shareholders having the reminder.
The offer by Barratt comes as both companies navigate a downturn in new home sales caused by higher mortgage rates squeezing buyers.
Last year Barratt Developments, which includes Barratt Homes and David Wilson Homes, built more than 2,000 properties in its West region which encompasses Gloucestershire . It contributed more than £401m to the UK's economic output.
Barratt Homes is currently developing land at Winnycroft Lane in Matson into more than 400 homes and a site in Innsworth into an estate of 144-homes known as Whittle Gardens.
Its website lists housebuilding projects Merlin Gate in Newent, Hawk Rise in Ledbury, Forest Grove in Berry Hill and Brfunel Quarter in Chepstow.
A statement by Barratt said Redrow will become the "premium brand" in the new combined group.
It expects the three brands to accelerate delivery of homes by introducing the Redrow brand on appropriate Barratt sites and vice versa.
It added: "The combined group will take advantage of the complementary geographical footprints of Barratt and Redrow, with a total land pipeline of 92,345 plots as at 31 December 2023."
Barratt's existing non-executive chair, CEO, CFO and COO will take over the top jobs at the new group and the boards of the two companies will be combined.
David Thomas, group chief executive of Barratt, said:"We have great respect for Redrow, its overall strategy, its leadership and employees, and its high-quality homes and communities.
"This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional homebuilder in terms of quality, service and sustainability, able to build more of the high-quality homes this country needs.
"The Combined Group would leverage the respective strengths of both Barratt and Redrow, delivering significant benefits to our people, our supply chains, and - most importantly - our customers."
Barratt and Redrow generated aggregate revenue of £7.45million in 2023, delivering total completions of 22,642 and had an aggregate net cash position of £874m.
Matthew Pratt, group chief executive of Redrow, said: "Together, we'll be in a much better position to offer a broader range of high-quality and energy efficient homes to customers.
"The Redrow brand, with its premium, characterful homes, has an excellent reputation and will remain a key part of the Combined Group.
"As with Barratt, Redrow's fifty-year success story is based on its people, products and supply chain partners.
"Both businesses are a great fit and there are many exciting opportunities to innovate and share knowledge across a range of different areas."
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