Wimpey and Woodrow agree to merge

Properties Barbican | Barbican Estate Agents

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 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.

'Good sense'

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.

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.

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."

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.

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.


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.