It's official: The two British homebuilders George Wimpey and Taylor Woodrow are now one company. Trading on the U.K. stock exchange under the new stock name Taylor Wimpey began first thing Tuesday (July 3) morning.
It is a merger of near equals, with Taylor Woodrow's shareholders receiving 51% of the new merged company's stock while Wimpey's will hold 49%.The new company will operate under the Taylor Woodrow name in North America, but the Morrison brand name, which was used by Wimpey in the United States, will continue to exist in the merged company's product line. Last year Taylor Woodrow built 4,492 homes in the United States, while George Wimpey built 4,347 under the Morrison Homes name.
The merger is expected to yield nearly immediate cost-savings in both the U.K. and the United States, where the two companies operate in the same markets in Florida, Texas, Arizona and California. By merging, Taylor Wimpey is 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.
George Wimpey's skills as an efficient builder combined with Taylor Woodrow's land purchasing and development expertise are expected to make a strong partnership. In addition, the merger will also provide a broader product offering by combining Taylor Woodrow's more upscale product in the United States with Morrison Homes mid-market offerings. Plus, together, the pair should have a greater ability to pool their capital to grow.
Taylor Woodrow was founded in 1921 when 16-year-old Frank Taylor borrowed 100 pounds to build two working-class homes in Blackpool, England. As he was too young to form his own company, his uncle Jack Woodrow lent his name to the business. It has operated in North America since 1936
In 1880 George Wimpey established a stone-working business in Hammersmith, West London. In 1919 G. W. Mitchell purchased the company and expanded from road contracting into house building. It acquired Morrison Homes in America in 1984.
For more details about the merger see Big Builder's July issue.