The UK's competition watchdog, the Competition and Markets Authority (CMA), is set to investigate a proposed £2.5 billion merger between two of Britain's largest housebuilders, Barratt and Redrow.
Barratt Developments announced plans to acquire rival Redrow in February. The deal would unite two "highly complementary" companies and speed up the construction of much-needed homes across the country.
The new group, likely to be named Barratt Redrow, aims to build around 23,000 homes annually and save at least £90 million each year. However, the CMA has expressed concerns about whether this merger could significantly reduce competition within the industry.
This can occur when two large companies merge, potentially leading to less choice for customers and higher prices or lower quality services. The watchdog has the authority to block a merger or enforce changes to address its concerns after investigating potential risks.
The CMA has begun gathering information about the merger as part of the early stages of a formal investigation. In a separate case, the CMA is also investigating eight housebuilders, including Barratt and Redrow, over evidence that they may be sharing commercially sensitive information. This could potentially affect the development of sites and the prices of new homes.
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The regulator has highlighted that the UK's housebuilding sector needs a "significant intervention".
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