Shareholders approve £2.5bn Barratt and Redrow merger plan

Shareholders approve £2.5bn Barratt and Redrow merger plan

A proposed £2.5 billion merger between two of the UK’s largest housebuilders has gained the support of shareholders of both companies.

The boards of Barratt Developments and Redrow agreed a merger deal in February which priced Redrow at £2,524 million.

Under the terms of the deal put to shareholders yesterday, Barratt shareholders will get 67.2% of the combined group and Redrow shareholders will get 32.8%, effectively making it a Barratt takeover.

At separate meetings, Barratt shareholders voted 99.82% in favour of the deal and Redrow’s by an even more overwhelming 99.92%.

The combined group will be called Barratt Redrow and become a third brand and division of the group, alongside Barratt Homes and David Wilson Homes. The move would create a mega housebuilder turning over £7.45bn and delivering over 22,600 homes a year, based on past performance, with net cash of £874m.

When the deal was announced in February, Barratt’s board said the move would generate pre-tax cost savings of at least £90m a year by the third year after the completion.

The Competition and Markets Authority announced in March that it had opened an investigation into the deal and whether it “may be expected to result in a substantial lessening of competition”.

Barratt and Redrow are also among eight housebuilders being probed by the watchdog over potential “anti-competitive behaviour”.

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