Taylor Woodrow and George Wimpey have agreed to merge to create the UKs largest housebuilding group with annual revenues of over 6.7bn.
Once the merger completes, the combined group, renamed Taylor Wimpey, will boast total UK house completions of approximately 22,000 per annum, total North American house completions of approximately 9,000 per annum and a combined market capitalisation of approximately 5bn.
In a Stock Exchange announcement George Wimpey says the merger will enhance shareholder value by creating a business with a strong strategic position in both the UK and the chosen markets in North America.
The combined group has a pro forma landbank of over 92,000 plots in the UK and will be strengthened in the US through the combination of operations across some US markets.
In addition, it states shareholders of the combined group will also benefit from enhanced profitability through the delivery of significant cost savings.
The combined group will focus on driving out costs from the combined operations.
This is expected to lead to at least 70m of pre-tax synergies by the end of the first full financial year following the effective date, at a one-off cost of approximately 60 million, the majority of which will be incurred in the current financial year
These synergies are in addition to previously announced cost savings of 25m in George Wimpeys UK business, and combined savings in excess of $20m in the US in 2007.
The boards of Taylor Woodrow and George Wimpey have agreed a unified management team under the leadership of Peter Redfern as chief executive.
Reporting to Redfern will be Peter Johnson as finance director, Ian Sutcliffe as UK chief executive officer, and John Landrum as North American president.
This executive team will sit on the board, which will be chaired by Norman Askew with equal non-executive director representation from Taylor Woodrow and George Wimpey.
David Williams will be the senior independent director, and the non-executive directors will be Mike Davies, Brenda Dean, Andrew Dougal, Katherine Innes Ker and Anthony Reading.
Taylor Woodrow Shareholders will be entitled to receive and retain a final dividend of 9.75 pence per Taylor Woodrow Share payable on July 2 2007.
George Wimpey Shareholders will be entitled to receive and retain a final dividend of 13.10 pence per George Wimpey Share payable on May 11 2007.
Norman Askew, chairman of Taylor Woodrow, says: This merger provides both businesses with a unique opportunity to combine their respective strengths to create the largest UK housebuilder with a much improved position in the US, taking advantage of its medium and long term growth prospects.
With Peter Redfern and the rest of the management team, John and I believe we have the balance of skills and commitment to drive growth and deliver enhanced value to shareholders.
It is the intention to execute our integration plan as soon as practically possible in order to minimise disruption and add maximum value to the businesses and operations of the combined group.
John Robinson, chairman of George Wimpey, adds: The board of George Wimpey believes that the combination with Taylor Woodrow presents exciting opportunities to our shareholders and employees alike, and we unanimously recommend it to all our stakeholders.
In addition, Norman and I would like to take this opportunity to thank all of Taylor Woodrows and George Wimpeys employees for their valuable contribution to the businesses over the years.
We would also like to thank Ian Smith for the significant part he has played in creating this exciting new company.
I believe that going forward the Merger will create excellent opportunities for employees at all levels within the combined group.