Wimpey and Woodrow agree to merge

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, reported The BBC.

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.

A spokesman for Taylor Woodrow said he expected job losses from the merger to be in the region of "hundreds".

Ian Morris said the job cuts would result from the companies creating a single UK headquarters, and head office for homebuilding.

He called reports that 10% of the workforce would be trimmed as "speculative".

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".

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.

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.

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.

The new company will be 51%-owned by Taylor Woodrow shareholders and 49%-owned by George Wimpey investors.