Barratt: Tacit Antitrust Clearance Granted for Redrow Tie-Up; Shares Remain Appealing

We make no change to our GBX 760 fair value estimate for no-moat Barratt Developments following news that the UK’s antitrust watchdog—the Competition and Markets Authority—has all but approved its proposed tie-up with smaller rival Redrow. As we’d anticipated, the CMA investigation has concluded that the mooted merger will not have a material impact on competitive dynamics within the UK’s homebuilding sector. Indeed, the CMA identified just one out of the 400 local regions across the UK in which Barratt and Redrow operate where competition may be adversely affected.