UK housebuilders Barratt and Redrow have agreed a £2.5bn merger deal in which Barratt will acquire 100% of Redrow’s shares.
Under the terms of the agreement each Redrow shareholder will receive 1.44 new Barratt shares for each Redrow share, representing a premium of approximately 27.2%.
Following completion of the transaction, Redrow shareholders will hold almost one-third (about 32.8%) of the combined group and Barratt shareholders will hold about 67.2%. The combined group will be renamed Barratt Redrow.
Barratt said that the combination of two of the UK’s biggest housebuilders would create a strong brand portfolio with three distinct brands, offering customers a wider range of home types and price points.
“This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional homebuilder in terms of quality, service and sustainability, able to build more of the high-quality homes this country needs,” said David Thomas, group chief executive of Barratt. “The combined group would leverage the respective strengths of both Barratt and Redrow, delivering significant benefits to our people, our supply chains, and — most importantly — our customers.”
Matthew Pratt, group chief executive of Redrow, said that together, the two businesses will be in a better position to offer a broader range of high-quality and energy efficient homes.
“The Redrow brand, with its premium, characterful homes, has an excellent reputation and will remain a key part of the combined group,” he added.
“Both businesses are a great fit and there are many exciting opportunities to innovate and share knowledge across a range of different areas.”