U.K. housebuilder Barratt Developments agrees to buy peer Redrow for $3.2 billion.

By Ian Walker

Barratt Developments has agreed to buy smaller housebuilder Redrow for 2.52 billion pounds ($3.17 billion) in an all-share deal.

Under the agreement accepting shareholders of FTSE 250 listed Redrow will get 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 owning the rest.

“The Barratt directors and the Redrow directors believe that the combination will create an exceptional U.K. homebuilder in terms of quality, service and sustainability, delivering excellence and driving innovation for customers, employees, sub-contractors and the supply chain,” the companies said in a joint statement.

Write to Ian Walker at ian.walker@wsj.com

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