(Reuters) – Britain’s competition regulator launched a formal investigation on Friday into homebuilder Barratt’s 2.52 billion pound ($3.21 billion) all-stock deal to buy smaller rival Redrow to examine whether it has the potential to hurt competition.
WHY IT’S IMPORTANT
The purchase of Redrow would cement Barratt’s position as one of the largest builders in Britain in terms of both market value and the number of homes constructed. The merger is expected to boost the housing sector, which is emerging out of a challenging period.
CONTEXT
Barratt agreed to buy Redrow in early February.
The UK housing sector has seen significant consolidation in recent years, including when Vistry’s bought Countryside for 1.25 billion pounds in 2022.
On Thursday, homebuilder Bellway made public an all-share bid it proposed last month to acquire Crest Nicholson, which the latter rejected.
WHAT’S NEXT
The Competition and Markets Authority said it had until Aug. 8 to make its phase 1 decision on whether the deal will reduce competition in the UK.
($1 = 0.7850 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru, Additional reporting by Echha Jain; Editing by Eileen Soreng)
