Barratt has finalized a purchase of its competitor Redrow in a £2.5bn transaction, aiming to strengthen its position in the housing sector amidst a market slowdown.
The acquisition will result in a new entity named Barratt Redrow, anticipated to generate annual cost savings of about £90m.
Post-merger, Redrow will own roughly 32.8% of the combined company, while Barratt will hold about 67.2%.
Already a leading housebuilder in the UK, Barratt reported over £5bn in revenues last year, constructing over 17,000 homes. In contrast, Redrow’s 2023 revenues were £2.1bn, with nearly 5,500 homes completed.
David Thomas, CEO of Barratt, expressed enthusiasm about the merger, highlighting the synergy and potential for enhanced quality, service, and sustainability in homebuilding. He emphasized the goal of increasing the supply of high-quality homes in the country.
Steve Morgan, Redrow’s founder, praised Barratt as a respected homebuilder, and Matthew Pratt, Redrow’s CEO, noted that the merger forms a leading homebuilder in the UK.
This move comes as the British housing industry is recovering from its most significant downturn since the financial crisis, driven by high property prices and mortgage rates that led to a drop in sales last year.
According to a Rics’ UK residential market survey, house price declines in July were the most extensive since 2009.
Pratt mentioned that the combined strengths of the two companies would enable them to offer a wider range of high-quality, energy-efficient homes to customers.
