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Tuesday, 14 August, 2001, 06:06 GMT 07:06 UK
Wimpey buys McAlpine building unit
Model of new housing development with Wimpey and McAlpine logos
Wimpey's move could trigger wider consolidation
Property firm Alfred McAlpine said it had agreed to sell its house-building business to rival George Wimpey.

The price tag was 461m in cash, McAlpine said - slightly higher than the 440m indicated by speculation ahead of the deal.

The deal creates the UK's largest house building group with a value of more than 1bn.

UK house builders (by market capitalisation)
Berkeley Group: 929.5m
Persimmon: 898m
Barratt Development: 802.5m
George Wimpey: 724.9m
Wilson Bowden: 688.5m
Bellway: 395.5m
McAlpine: 357.8m

Wimpey said that it expected to cut about 450 jobs from the unit, as it merges it into its own operations.

Bigger players

The move could trigger a much wider shakeup of the UK house building industry, which analysts say is dominated by medium-sized firms.

Plans for new house building in the UK are well behind schedule, and house prices continue to soar in many parts of the country as new housing starts have fallen.

Part of the problem, according to some, is the range of small-to-medium building firms lacking the "assembly line" ethos and techniques which bring prices down in the US and much of Europe.

But in the meantime, prospects for the housing business have improved further, thanks to the recent surprise cut in UK interest rates.

McAlpine also announced that it plans to return more than 100m to shareholders during 2002.

Alfred McAlpine said it will retain assets worth 34m from its house-building unit.

The BBC's Quentin Sommerville
"The latest deal takes Wimpey into a more upmarket neighbourhood"
See also:

02 Aug 01 | Business
McAlpine in buyout talks with Wimpey
17 Aug 01 | Business
House giants come under same roof
12 Jun 00 | UK Politics
Showdown looms over new houses
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