UK Competition Watchdog Signals Potential Green Light for Barratt-Redrow Merger

The U.K.’s competition authority has indicated that the proposed merger between homebuilders Barratt Developments and Redrow may move forward, following the submission of remedial measures by the companies.

According to Reuters, the Competition and Markets Authority (CMA) acknowledged on Wednesday that it has “reasonable grounds to believe” that the measures offered by the two firms could be sufficient to address its concerns.

The merger, valued at £2.52 billion ($3.28 billion) and agreed upon in early February, would see Barratt acquire Redrow in an all-stock transaction. However, the CMA had previously raised competition concerns, particularly in a local area where Barratt has four developments and Redrow has one with fewer than 10 plots remaining for sale.

Earlier this week, Barratt revealed that a regulatory condition for the merger had been waived to allow for legal completion, though both companies would continue to operate separately until the CMA gives its final approval.

Per Reuters, Barratt noted in a separate statement on Wednesday that the CMA has until October 18 to decide whether to accept the proposed undertakings or any modifications to them.

Related: Towards a More Interactive Merger Review Process: UK CMA Proposes Amendments

As CPI previously reported, with the U.K.’s departure from the EU, global deals impacting U.K. competition, previously overseen by the European Commission under the “one-stop-shop” principle, are now frequently subject to parallel reviews by the CMA. This has resulted in divergent outcomes concerning clearance or acceptable remedies at an unexpectedly high frequency. The CMA’s expanded responsibilities have intensified scrutiny on its merger enforcement approach, revealing discrepancies between the EU and UK merger processes.

Source: Reuters