Barratt strikes £2.5bn deal to acquire rival Redrow

News07.02.2412.30 PM by James Wilmore

Barratt, the UK’s biggest house builder, has agreed a £2.5bn deal to buy its rival Redrow.

Barratt’s head office in Leicestershire (picture: Google Street View)

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Barratt strikes £2.5bn deal to acquire rival Redrow #UKhousing

Barratt, the UK’s biggest house builder, has agreed a £2.5bn deal to buy its rival Redrow #UKhousing

In a market announcement today, the companies said their boards have reached agreement on terms of an all-share offer from Barratt.

The combined group will be known as Barratt Redrow. It will have capacity to build “in excess” of 22,000 homes a year and is expected to bring in annual revenues of around £7.5bn, the filing said.

The listed firms said the tie-up will bring together their “highly complementary geographic footprints” and “accelerate the delivery” of new homes.

David Thomas, chief executive of Barratt, who will lead the new group, said: “This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional home builder in terms of quality, service and sustainability, able to build more of the high-quality homes this country needs.”

Matthew Pratt, chief executive of Redrow, added: “Both businesses are a great fit and there are many exciting opportunities to innovate and share knowledge across a range of different areas.”

Steve Morgan, founder and still the largest shareholder at Redrow, has also backed the tie-up.

The deal is expected to close in the second half of 2024, but remains subject to approval from shareholders.

The announcement comes as Barratt reported an 81% drop in half-year pre-tax profit to £95m, partly due to £62m of “legacy” costs related to tackling building safety.

Barratt, along with Redrow, are among 54 developers that have signed the government’s remediation contract, which commits them to fixing “life-critical” fire safety defects on buildings 11 metres or taller that they had built in the past 30 years.