The merge is likely to be accepted by the Competition and Markets Authority (CMA) in due course, with the CMA publishing a statement that said there were "reasonable grounds for believing the undertakings offered by the Parties or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002”.
On March 16 the CMA announced that it would investigate the deal, proposed in early February, and was considering whether the deal would result a 'substantial lessening of competition' within the market. It particularly focused on one location in Shropshire where there were a number of Barratt and Redrow developments, which could create competition issues in the area. However it said the merger “did not trigger UK-wide competition concerns”.
The CMA now has until October 18 to decide whether to accept the housebuilders’ undertakings on the local competition issue. As a result, some actions - including changing the name of the business to Barratt Redrow - will be paused until the CMA's decision and the firms will continue to operate independently until a decision has been reached.
On Wednesday evening the firms announced that, “following the delivery of a copy of the Court Order to the Registrar of Companies”, the scheme had “become effective”, with the entire share capital now owned by Barratt. It is expected that Redrow shares will no longer be traded on the main market as of tomorrow morning (Friday) at 8am, with applications made to the Financial Conduct Authority and London Stock Exchange to suspend and cancel Redrow's listing as well as add 450 million new Barratt shares to the official list.
