Barratt Developments PLC announced Monday that it will move forward with its approximately £2.5 billion ($3.2 billion) acquisition of rival homebuilder Redrow PLC this week, despite the ongoing investigation by the U.K.’s competition regulator. The decision to complete the deal before receiving a green light from the Competition and Markets Authority (CMA) is aimed at reducing uncertainty surrounding the transaction.
Barratt and Redrow to complete £2.5B Dea : Court Sanction Expected Tuesday
In a joint statement, Barratt and Redrow confirmed they have secured a court hearing scheduled for Tuesday to sanction the scheme, which will enable the deal’s completion. By doing so, Barratt and Redrow aim to mitigate any potential delays that could arise from the CMA’s investigation.
The CMA, however, retains the authority to halt the integration of the two businesses until it completes its inquiry. This is likely to include issuing an initial enforcement order, a standard procedure designed to preserve the status quo during an ongoing investigation.
CMA Investigation Continues
The CMA first raised concerns on Aug. 8, identifying potential competition issues in a specific area around Whitchurch, where Barratt and Redrow both have developments. The competition watchdog concluded its initial phase of inquiry into the deal, citing fears that the acquisition could harm consumers in that locality.
