The UK’s Competition and Markets Authority (CMA) said on Friday it is looking into Barratt’s recommended all-share offer to buy Flintshire-based Redrow in a deal valuing its smaller rival at about £2.52 billion.

The regulator, which has not yet launched a formal investigation, is seeking initial views on the impact that the deal could have on competition in the UK.

The CMA 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 CMA is issuing this preliminary ‘invitation to comment’ to allow interested parties to submit to the CMA any initial views on the impact that the transaction could have on competition in the UK.

“This invitation to comment is the first part of the CMA’s information-gathering process, in advance of the CMA’s formal investigation starting.

“The CMA may proactively contact companies and organisations that are active in the markets affected by the Merger, or have valuable insights or evidence that could assist the CMA’s investigation.

“To assist it with this assessment, the CMA invites comments on the transaction from any interested party.”

In February, Barratt, the UK’s biggest homebuilder, said it made a recommended all-share offer to buy Redrow in a deal valuing its smaller rival at about £2.52 billion.

The combined firm, to be called “Barratt Redrow”, would aim to deliver more than 22,000 homes each year in the medium term.

Under the terms of the proposed deal, which is backed by the boards of both companies but is subject to shareholder approval, each Redrow shareholder would get 1.44 new Barratt shares for each share they hold.