Market's view on Barratt Developments
Published on April 2024
- The Competition and Markets Authority has initiated an investigation into Barratt’s £2.5bn acquisition of Redrow, which could significantly lessen competition in the UK housing market.
- Concerns have been raised about approximately 800 job losses following the merger between Barratt and Redrow, affecting employees and management across overlapping central and support functions.
- The merger includes plans to close around nine divisional offices, as part of a broader office network review.
- Stock watchers are divided on the impact of the Barratt and Redrow deal, with some seeing potential future benefits despite current dividend cuts and potential market timing issues.
- There is skepticism about Barratt’s market timing, referencing past mergers and acquisitions that coincided with market downturns.
- Stock watchers are also discussing potential government interventions in the housing market, such as new ‘Help to Buy’ schemes ahead of the election, which could influence the sector’s dynamics.
- Amidst financial adjustments, there are indications that the dividend payout might be reduced, reflecting the company’s strategic shifts and current market conditions.