This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6494387.stm
The article has changed 7 times. There is an RSS feed of changes available.
Version 5 | Version 6 |
---|---|
Wimpey and Woodrow agree to merge | Wimpey and Woodrow agree to merge |
(about 7 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 firm will have a 14,000-strong workforce. Fewer than 5% - about 700 - people will lose their jobs, they say. | |
Shares in Taylor Woodrow closed nearly 13% higher as Wimpey shares rose 2.8%. | |
'Good sense' | '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 | 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". |
Analysts responded enthusiastically to the proposed deal. | Analysts responded enthusiastically to the proposed deal. |
Woodrow shares closed up 13% at 475 pence on the news, while Wimpey shares were up nearly 3% at 653p. | Woodrow shares closed up 13% at 475 pence on the news, while Wimpey shares were up nearly 3% at 653p. |
"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 | 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. |
Taylor Woodrow and Wimpey have US operations that overlap | Taylor Woodrow and Wimpey have US operations that overlap |
The housing market in the US is experiencing a slowdown as higher interest rates dampen consumer demand and increase repayment costs. | 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. | 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. | 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. | He explained that the UK currently needs about 200,000 new houses a year, though only about 150,000 are being built. |
More deals? | 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. | 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. | In February, Wilson Bowden has agreed to be bought by rival Barratt Developments in a deal worth £2.2bn. |