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| Version 2 | Version 3 |
|---|---|
| Wimpey and Woodrow agree to merge | Wimpey and Woodrow agree to merge |
| (about 2 hours later) | |
| Construction companies George Wimpey and Taylor Woodrow have agreed to merge in a deal that will create the UK's biggest homebuilder, worth about £5bn. | Construction companies George Wimpey and Taylor Woodrow have agreed to merge in a deal that will create the UK's biggest homebuilder, worth about £5bn. |
| The new company will be called Taylor Wimpey and will be large enough in terms of market value to merit a place on London's main FTSE 100 stock index. | The new company will be called Taylor Wimpey and will be large enough in terms of market value to merit a place on London's main FTSE 100 stock index. |
| The new company will have a combined workforce of about 14,000. | The new company will have a combined workforce of about 14,000. |
| According to the firms, less than 5% of the workforce, about 700 workers, will lose their jobs because of the merger. | According to the firms, less than 5% of the workforce, about 700 workers, will lose their jobs because of the merger. |
| 'Good sense' | |
| George Wimpey chief executive Peter Redfern said that most of the job losses would be in the UK. | George Wimpey chief executive Peter Redfern said that most of the job losses would be in the UK. |
| Ian Morris, a spokesman for Taylor Woodrow, said the job cuts would result from the companies creating a single UK corporate headquarters, and one operations head office for homebuilding. | Ian Morris, a spokesman for Taylor Woodrow, said the job cuts would result from the companies creating a single UK corporate headquarters, and one operations head office for homebuilding. |
| It's a good strategic fit and the synergies they're targeting look realistic Colette Ord, Numis Check Wimpey's shares See Taylor Woodrow's shares | |
| Job cuts would probably be in the "hundreds, rather than going over 1,000", Mr Morris said, although he added that "nothing is cast in stone". | Job cuts would probably be in the "hundreds, rather than going over 1,000", Mr Morris said, although he added that "nothing is cast in stone". |
| Woodrow shares jumped 16% to 487.5 pence on the news, while Wimpey jumped 6% to 674p. | Woodrow shares jumped 16% to 487.5 pence on the news, while Wimpey jumped 6% to 674p. |
| "The Wimpey-Taylor Woodrow deal makes good sense," said Colette Ord, an analyst at Numis. "It's a good strategic fit and the synergies they're targeting look realistic." | "The Wimpey-Taylor Woodrow deal makes good sense," said Colette Ord, an analyst at Numis. "It's a good strategic fit and the synergies they're targeting look realistic." |
| Market dips | |
| The firms said the merger would allow them to cut costs by £70m a year and boost business in both the UK and US. | The firms said the merger would allow them to cut costs by £70m a year and boost business in both the UK and US. |
| Mr Morris said that joining forces with Wimpey and its efficient house building team would allow Taylor Woodrow to better exploit its UK land bank. | Mr Morris said that joining forces with Wimpey and its efficient house building team would allow Taylor Woodrow to better exploit its UK land bank. |
| At the same time, in the US the new company would be a bigger player in a market where at present the two firms were successful, but smaller, than many of their rivals. | At the same time, in the US the new company would be a bigger player in a market where at present the two firms were successful, but smaller, than many of their rivals. |
| The housing market in the US is experiencing a slowdown as higher interest rates dampen consumer demand and increase repayment costs. | |
| Many observers are predicting that the UK housing market also will stop growing as quickly as in past years, mainly because of an increase in interest rates. | |
| However, Taylor Woodrow's Mr Morris said that the underlying market in both the UK and US was stable and there was a steady demand for new houses. | |
| He explained that the UK currently needs about 200,000 new houses a year, though only about 150,000 are being built. | |
| More deals? | |
| After the merger, Taylor Wimpey will have a total of 22,000 UK house completions a year, with another 9,000 a year in the US. | After the merger, Taylor Wimpey will have a total of 22,000 UK house completions a year, with another 9,000 a year in the US. |
| Wimpey's chief executive Peter Redfern will take control of the merged company, while the chairman of Taylor Woodrow, Norman Askew, will remain in that role. | Wimpey's chief executive Peter Redfern will take control of the merged company, while the chairman of Taylor Woodrow, Norman Askew, will remain in that role. |
| The new company will be 51%-owned by Taylor Woodrow shareholders and 49%-owned by George Wimpey investors. | The new company will be 51%-owned by Taylor Woodrow shareholders and 49%-owned by George Wimpey investors. |
| Analysts said that there was a good chance of more consolidation in the UK house building sector, and shares of rival firms Persimmon, Redrow, Bellway and Bovis Homes all rose on the London stock market. | |
| In February, Wilson Bowden has agreed to be bought by rival Barratt Developments in a deal worth £2.2bn. |