New homes giants merge to form UK’s biggest house builder

Two new build household names often favoured by landlords buying investment properties have announced a merger.

Barratt has reached a £2.5 billion deal to buy rival Redrow, creating the UK’s largest house builder.

A joint statement from the companies’ boards says the move would bring together complementary brands and achieve significant cost savings. 

David Thomas, group chief executive of Barratt, says: "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."

And Matthew Pratt, group chief executive of Redrow, adds: "Redrow and Barratt combined creates a leading UK homebuilder. Together, we'll be in a much better position to offer a broader range of high-quality and energy efficient homes to customers. The Redrow brand, with its premium, characterful homes, has an excellent reputation and will remain a key part of the Combined Group. As with Barratt, Redrow's fifty-year success story is based on its people, products and supply chain partners. Both businesses are a great fit and there are many exciting opportunities to innovate and share knowledge across a range of different areas."

Steve Morgan, Redrow's veteran founder, says: "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." 

The companies say the Redrow brand - focussing on larger high-spec homes for more affluent buyers - will continue as part of Barratt, which already operates the David Wilson Homes brand, which it bought in 2007. 

The combined group would be renamed Barratt Redrow and build roughly 22,000 homes a year, based on the two companies’ current performance. The companies said they expected annual cost savings of £90m with the combined group having revenues of £7.5 billion.

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