The proposed merger of UK-based home builders Taylor Woodrow PLC and George Wimpey PLC, moved forward another step Tuesday when Taylor Woodrow's shareholders approved the union at the company's Extraordinary General Meeting.
Shareholders of Wimpey, which operates under the name of Morrison Homes in the United States, will vote on the matter June 4.
The merger would create the largest home builder in Britain and the 15th biggest in the United States by 2006 closing numbers.
The all-share merged entity, to be called Taylor Wimpey, was announced in March. The companies have agreed to a unified management team to be lead by Peter Redfern, Wimpey's chief executive.
In the U.S. market last year Morrison Homes closed 4,347 homes, according to Builder magazine, while Taylor Woodrow closed 2,900. The combined sales of 7,247 would have made the company No. 15 in the country, just behind Toll Brothers (8,601 closings) and ahead of Weyerhaeuser Real Estate Co. (5,836).
The merged companies' combined operations are expected to be able to cut 70 million pounds ($137.8-million) from pre-tax costs in the first financial year. In addition, the new entity would increase margin growth in the UK by combining the cost efficiencies and business structure of George Wimpey with the strategic land development skills of Taylor Woodrow, "reducing the dependence on high sales rate," the companies' announcements say.
For the North American market, the companies say the merger would Enhance strength in Florida, California, Arizona, and Texas "where both have highly complementary operations;" provide a broader product offering through the Taylor Woodrow brand and strengthen the mid-market through Morrison Homes; and create greater ability to deploy capital through merged balance sheets.
Under terms of the merger, Taylor Woodrow shareholders would hold 51% of the new entity's shares, while George Wimpey shareholders would have the remaining 49%.