07 February 2024 , 09:55
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Housebuilding giants Barratt and Redrow have agreed to a £2.5 billion merger deal.
The two firms plan to join forces to speed up the construction of much-needed homes across the country. The deal will see Barratt purchase all shares in Redrow, with plans to rename the combined business as Barratt Redrow.
This values Redrow at £2.52 billion, offering a 27% premium for shareholders based on Tuesday's closing share price. Before the merger can be finalised, it needs the green light from both sets of shareholders and the financial regulator. Once complete, Redrow investors will own about a third of the new group, while Barratt shareholders will hold two-thirds.
Barratt's boss, David Thomas, expressed his respect for Redrow, calling the merger an "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.".
He says the union will create an exceptional homebuilder, capable of delivering more high-quality homes that the UK desperately needs. Matthew Pratt, Redrow's chief, echoed these sentiments, stating the merger will result in a leading UK homebuilder. He added that both businesses would be better positioned to offer a wider range of high-quality, energy-efficient homes to buyers.
Barratt's £2.5bn Redrow merger to cost 800 jobs as offices face closure
The companies have announced that their partnership could save them at least £90 million a year. However, this might result in the loss of about 10% of jobs across the combined business. Barratt has reassured that it does not plan to significantly reduce building site-based or sales office-based staff as existing sites will continue to operate as usual.
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