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Wimpey and Woodrow agree to merge Wimpey and Woodrow agree to merge
(about 3 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.
A spokesman for Taylor Woodrow said he expected job losses from the merger to be in the region of "hundreds". According to the firms, less than 5% of the workforce, about 700 workers, will lose their jobs because of the merger.
Ian Morris said the job cuts would result from the companies creating a single UK headquarters, and head office for homebuilding. George Wimpey chief executive Peter Redfern said that most of the job losses would be in the UK.
He called reports that 10% of the workforce would be trimmed as "speculative". 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.
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".
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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 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.
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.