Barratt seals £2.5bn takeover of Redrow

The UK’s largest housebuilder has agreed a deal to acquire its rival Redrow.

The £2.5bn deal, backed by both company boards, would see Barratt take a 67.2% stake in Redrow, subject to shareholder approval.

The combined group, which would go by the name Barratt Redrow, would have a market capitalisation of more than £7bn and a pipeline of 92,300.

The Redrow brand would still be retained for marketing its new-builds.

Commenting on the combination, David Thomas, group chief executive of Barratt, said: "We have great respect for Redrow, its overall strategy, its leadership and employees, and its high-quality homes and communities. This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional homebuilder in terms of quality, service and sustainability, able to build more of the high-quality homes this country needs. 

“The combined group would leverage the respective strengths of both Barratt and Redrow, delivering significant benefits to our people, our supply chains, and - most importantly - our customers."

Steve Morgan, Redrow's founder, added: "During the 50 years since I founded Redrow, I could not be more proud of the unique reputation it has earned for building premium homes and thriving communities.

“Barratt is a home builder I have long admired due to their likeminded attention to quality. I am confident that the Barratt / Redrow combination with their three high-quality complementary brands, will create a standout home builder for the future and accelerate the delivery of much needed homes across the UK."

It comes as interim results from Redrow for the 26 weeks to 31 December 2023 showed revenue in the first half of the year was down £275m to £756m “due to the subdued housing market.”

Matthew Pratt, group chief executive of Redrow, said: "Despite numerous macroeconomic headwinds we have produced a resilient set of results. We continue to deliver on our proven strategy of creating aspirational homes from our award-winning Heritage Collection, all situated in beautiful, well-designed places.

“In recent weeks the housing market has shown signs of improvement, with increasing mortgage approvals and reduced mortgage rates with greater competition amongst lenders. This in turn has improved homebuyer confidence and raised the prospects of a return to a more stable sales market.”