CMA raises Cheshire concerns over Barratt, Redrow merger

The £2.5bn deal could lead to “higher prices and lower quality homes for homebuyers” in the catchment area close to the border with Shropshire, according to the Competitions and Markets Authority.

Barratt’s proposed takeover of Redrow has hit a snag after the CMA’s initial review asked the parties to address concerns about the amount of land the housebuilders own in an 11-mile radius around Whitchurch, which includes Nantwich.

Investigations into the housebuilders’ land banks found that Barratt and Redrow “currently hold a high combined share of land in the catchment area centred around the Barratt development at Tilstock Road, with the addition of Redrow’s development at Kingsbourne in Nantwich”.

The housebuilders have until 15 August to submit proposals that address the CMA’s concerns.

If both parties can put the CMA’s mind at ease regarding the Cheshire/Shropshire issue, it could be all systems go for the deal.

The concern around competition in this area was the only one raised in CMA’s initial review of the deal, which was announced earlier this year. 

“The CMA found that once the deal is complete, the merged business will continue to face competition from rivals nationally and in all other overlapping local areas (including from other large and smaller regional housebuilders, with additional constraints coming from homes sold via the second-hand market),” the report states.

Joel Bamford, executive director for mergers at the CMA, said: “Prospective homebuyers must not be disadvantaged as a result of deals like this one – with the potential loss of competition leading to even higher house prices or lower quality homes.

“Our initial investigation found concerns specifically in one area in and around Whitchurch, the companies now have the opportunity to agree workable solutions which address our concerns rather than move to a more in-depth investigation.”