British-based Barratt Developments is to buy smaller rival Wilson Bowden for £2.2 billion in cash and shares to create Britain's biggest housebuilder, the two firms said today.
Barratt and Wilson Bowden together built just over 19,700 houses in the year ended June 30th, putting the combined firm ahead of current market leader Persimmon and on course to enter the benchmark FTSE 100 stock index.
Barratt will pay 950 pence in cash and 1.0647 new shares for each Wilson Bowden share, putting a value of 2,245p on Wilson Bowden shares based on Barratt's closing share price on Friday.
This is 23 per cent above Wilson Bowden's closing share price on November 24th, the day before it said it was in talks that could lead to a takeover and 63 per cent above its price on July 14th when the Wilson family said it might sell its stake.
The deal is the biggest to date in the country's building sector and sparked speculation of further consolidation as companies look to expand their geographic reach, increase their land holdings and benefit from economies of scale.