Britain's biggest homebuilder Barratt will buy Redrow in an all-stock deal valuing its smaller rival at about 2.52 billion pounds ($3.18 billion), they said on Wednesday, aiming to capitalise on the fledgling recovery in the market.
This is the second consolidation in the sector in as many years after affordable-housing-focused builder Vistry bought rival Countryside for about 1.25 billion pounds in 2022.
The newest combination, to be renamed "Barratt Redrow," aims to deliver more than 22,000 homes each year in the medium term, which is between 57% and 63% more than the 13,500 to 14,000 deliveries Barratt expects to deliver by itself in fiscal 2024.
British housebuilders have struggled for the past couple of years as high interest rates dented demand and build costs rose.
They have been cautious about the future as well, despite signs of stabilization -- including a rise in home prices last month -- spurred by cheaper mortgage loans.
Persons:
homebuilder Barratt, Vistry, Barratt, Redrow's, British housebuilders
Organizations:
Countryside
Locations:
British