UK housebuilder Barratt Developments (LSE: BDEV) has agreed the terms of a £2.52 billion all-share takeover for smaller rival Redrow, valuing the company at 1.44 Barratt shares per Redrow share. The deal will see Redrow shareholders own around 33% of the combined Barratt Redrow group.
The merger comes as both firms reported falling profits amid a subdued UK housing market. Barratt profit plunged 70% while Redrow profit more than halved. Barratt also cut its dividend by over 50%.
Read More News:
Frasers Group ups stake in Boohoo
However, the firms said the deal would create an “exceptional UK housebuilder” able to accelerate housing delivery. The enlarged group will operate under the Barratt Redrow name.
Shares in Barratt fell 7.6% on the news while Redrow jumped 14%. The deal remains subject to shareholder and regulatory approval but has the backing of both firms’ directors.
