On 7 February 2024, the boards of Barratt Development plc (LON:BDEV) and Redrow plc (LON:RDW) announced that they had reached agreement on the terms of a recommended all-share offer for the combination of Barratt and Redrow, pursuant to which Barratt will acquire the entire issued and to be issued ordinary share capital of Redrow. The Combination is being implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006, with full terms and conditions of the Combination set out in the scheme document which was published on 19 April 2024.
On 8 August 2024, the United Kingdom’s Competition and Markets Authority (the “CMA“) concluded its Phase 1 investigation in respect of the Combination and found that the Combination does not raise any UK-wide competition issues but that it had concerns regarding the supply of new build private residential housing in only one of the more than 400 local areas where the two companies overlap under the CMA’s chosen methodology to assess the local effects of the Combination, and where there were fewer than 10 plots remaining to sell at the time of the CMA’s review. Following this announcement, Barratt and Redrow have engaged with the CMA with the objective of agreeing suitable undertakings which would address the CMA’s limited concerns and avoid the need for a reference to a full Phase 2 investigation.
Undertakings in lieu of a Phase 2 investigation
On 15 August 2024, the parties submitted to the CMA undertakings in lieu of a reference to a Phase 2 investigation.
Today the CMA has announced that it considers there are reasonable grounds to believe that the undertakings offered by the parties, or a modified version of them, might be accepted by the CMA to remedy the issues it had identified, thereby precluding the need for a Phase 2 investigation.
In line with standard procedure, the CMA has until 18 October 2024 to decide whether to accept the undertakings, with the possibility to extend this timeframe to 13 December 2024 if it considers there are special reasons for doing so.
Next steps
The last day of dealings in, and for the registration and transfer of, Redrow Shares, will be today, 21 August 2024. No transfers of Redrow plc Shares will be registered after 6:00 p.m. today. The Scheme is also expected to become effective later today.
Further announcements will be made when appropriate.
Other
Full details of the Combination are set out in the Scheme Document, which is also available on Barratt’s website at https://www.barrattdevelopments.co.uk/investors/barratt-redrow and Redrow’s website at https://investors.redrowplc.co.uk/offer-for-redrow.
All references to times in this announcement are to London time, unless otherwise stated.
