In a seismic shift for the UK housing landscape, Barratt Developments, the nation's leading housebuilder, has announced a £2.54bn acquisition of its esteemed competitor, Redrow. This transformative all-share deal, representing a 27% premium on Redrow's current share price, signifies the creation of a powerhouse entity dubbed "Barratt Redrow."
This strategic move orchestrates the birth of a mega house builder, poised to generate an annual turnover of £7.45bn and deliver an impressive 22,600 homes, drawing upon the combined strengths of both companies. Retaining the distinct identities of Barratt, Wilson Homes, and Redrow, the enlarged entity boasts a robust net cash position of £874m, indicating financial stability and room for further growth.
Beyond the immediate financial prowess, Barratt anticipates £90m in cost-saving synergies through optimized supply chain consolidation. Notably, the deal has garnered the enthusiastic support of Redrow's founder, Steve Morgan, who sees it as a natural progression driven by shared values.
"Barratt is a home builder I have long admired due to their likeminded attention to quality," said Morgan, reflecting on his 50-year legacy at Redrow. "I am confident that the Barratt Redrow combination...will create a standout home builder for the future and accelerate the delivery of much needed homes."
David Thomas, Barratt's Group Chief Executive, echoed the sentiment, highlighting the synergy between the two companies: "This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional home builder...able to build more of the high-quality homes this country needs."
Pending regulatory and shareholder approval, the deal is expected to close in the second quarter of 2024. This landmark union promises to reshape the UK housing market, with Barratt Redrow poised to become a dominant force, delivering exceptional homes and shaping communities for years to come.