Britain’s largest home builder, Barratt, has entered into an agreement to acquire its competitor Redrow in a deal valued at £2.54 billion. The transaction, structured as an all-share deal, represents a 27% premium to Redrow’s current share price, with each Redrow share set to receive 1.44 Barratt shares under the proposed terms.
Upon completion, Redrow shareholders will hold approximately 33% equity in the combined entity, which will operate under the name Barratt Redrow. The merger is poised to create a major player in the housing industry, with an estimated annual turnover of £7.45 billion and a capacity to deliver over 22,600 homes annually, based on historical performance. The combined entity will maintain three distinct brands: Barratt, Wilson Homes, and Redrow, and boast a net cash position of £874 million.
Barratt anticipates realizing £90 million in cost-saving synergies from the merger and foresees opportunities to streamline the supply chain. Redrow’s founder, Steve Morgan, has voiced support for the deal, expressing confidence in the combined entity’s ability to accelerate home delivery and uphold quality standards.
David Thomas, Group Chief Executive of Barratt, views the acquisition as an opportunity to create a leading home builder distinguished by quality, service, and sustainability. He believes that leveraging the strengths of both Barratt and Redrow will yield significant benefits for employees, supply chains, and customers.
Subject to regulatory and shareholder approval, the transaction is expected to close in the second quarter of the year.
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By Ravi Kumar
