Key events
Introduction: UK competition watchdog to investigate Barratt’s proposed £2.5bn Redrow acquisition
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The UK’s competition watchdog has said it will investigate the country’s biggest housebuilder Barratt’s proposed acquisition of its rival Redrow for £2.5bn. It said:
The Competition and Markets Authority (CMA) is considering whether it may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
The two companies last month reached an agreement over an all-share offer from Barratt, which will cement its position as the country’s largest housebuilder.
The merged group, to be called Barratt Redrow, is expected to build about 23,000 homes a year and have a turnover of more than £7bn. The combined market value is around £7.2bn.
Berkeley Group, an upmarket house builder, said today that sales between November and February were a third lower than a year earlier but added:
Enquiry levels are good, with customers looking for the prevailing political and economic uncertainty to recede and interest rates to begin to fall.
Pricing has been stable across our sites during the period and above business plan levels, while build cost inflation is negligible across most trades.
Berkeley reaffirmed that it aims to deliver at least £1.5bn of pre-tax profits in the three years to 30 April 2026, including a £550m profit this year – down from £604m last year and returning to 2022 levels.
Anthony Codling, housing analyst at RBC Capital Markets, said:
A short and snappy trading update from Berkeley Group this morning saying that everything is on track despite those pesky market headwinds and uncertainties. Berkeley seems to be able to deliver whatever the weather.
In other corporate news, Vodafone has sold its Italian business to Swisscom for €8bn, which will merge it with its Italian subsidiary Fastweb. The deal will create Italy’s second-biggest fixed-line broadband operator behind TIM.
Yesterday’s mixed bag of US economic data, which pointed at higher-than-expected inflation and lower-than-expected spending in the US, forced the market to reconsider the Federal Reserve expectations.
The probably of a June interest rate cut fell to 60%, bond yields jumped, the dollar index rose sharply and stocks declined.
The Agenda
