Barratt Developments BDEV,
agreed to buy smaller housebuilder Redrow RDW,
for £2.52 billion ($3.17 billion) in an all-stock deal.
Under the deal, accepting shareholders of FTSE 250 listed Redrow will receive 1.44 new Barratt shares for each share held. The offer value is a 27% premium to Redrow’s closing price of 600 pence on Tuesday.
Upon completion of the deal, Redrow shareholders will own 32.8% of the combined group, with Barratt shareholders holding the remainder.
“The directors of Barratt and the directors of Redrow believe the combination will create an outstanding UK housebuilder in terms of quality, service and sustainability, delivering excellence and driving innovation for customers, employees, subcontractors and the supply chain,” the companies said in a joint statement.
Write to Ian Walker at ian.walker@wsj.com