PERSIMMON today entrenched itself at the top of Britain's housebuilding league after buying Cheltenham-based rival Westbury for £643 million - a move that could see the enlarged group knocking on the door of the FTSE-100.
Analysts said the deal would push the firm - which was behind the conversion of the luxury Bond Building apartment complex at Bonnington - past Barratt in terms of the number of houses it builds each year.
And they believe the move could spark fu
rther deals in the sector, which is mired in fierce competition and has been spending more on marketing and incentives at a time when labour and raw material costs have been rising.
York-based Persimmon said the proposed tie-up, which has been backed by the Westbury board but still needs the endorsement of shareholders, put it on course to complete as many 16,700 homes next year and took it into new regions, while also boosting its land bank.
Persimmon chief executive John White said: "The Westbury business is an excellent geographical and product fit for Persimmon. It will be integrated quickly into our existing regions and business, and elevate the output of our Charles Church brand."
Persimmon - which staged a £560 million takeover of Beazer in 2001 -has operations across England, Scotland and Wales. But it said the addition of Westbury brought "critical mass" in regions including the Midlands, Kent and the north-west of England.
The vulnerability of Westbury to a takeover has grown since it posted a 26 per cent drop in half-year profits last month.
Rachael Waring, an analyst at Numis Securities, said: "It's a good deal for Persimmon, it will give them huge buying power."
Today's deal is priced at 560p a share, in line with expectations when it emerged earlier this month that the pair were talking about a tie-up.
Persimmon, which is already Britain's biggest housebuilder by market capitalisation and will have an enlarged value of about £3.7 billion, said synergy benefits would be more than £25m in 2006, rising to at least £40m in 2007.
One-off costs related to the deal are likely to be around £12m, the company added.
