27/05/2008
Two of the country's biggest housebuilders are in discussions over a £1.3 billion merger, it has been reported.
Bellway is said to have raised the possibility of an all-share merger with its construction rival Redrow.
It is the second time Bellway, the fifth biggest housebuilder in the UK by stock market value, has approached Redrow, the seventh biggest.
Worth £824 million, Bellway is believed to have spoken to Redrow as it has a landbank of 25,700 future plots.
Founded in 1946, Bellway has already admitted this year to facing "difficult times" and posted a 3.9 per cent drop in interim pre-tax profits to £96.9 million in March.
Redrow, meanwhile, saw a fall from £54.7 million to £35.8 million in its pre-tax profits from operations in the six months to December 31st last year.
The possibility of the two firms joining together comes as the Office of National Statistics revealed demand for new home construction fell from 8.3 million in the fourth quarter of 2007 to 7.7 million for the first three months of 2008.
Demand for new homes fell by 27 per cent in the first quarter of this year compared to the last three months of 2007.