Britain’s biggest housebuilder by market value Persimmon plc has agreed a £643m takeover deal with rival Westbury plc and promised to safeguard the latter’s Space4 timber frame business.

The merger, which still needs approval from both companies’ shareholders, will provide Persimmon with a greater regional spread of business, a bigger land bank and “significant synergy benefits” for the enlarged group, whose annual housing output would be close to 17,000 units.

A Persimmon spokesperson said the company intended to run Westbury’s Space4 modular timber frame home factory at Castle Bromwich, and increase production by running some of its own volume through the facility.

About 10% of Persimmon’s homes are timber frame, mainly in Scotland, made by the likes of Robertson Timberkit and Stewart Milne Timber Systems.

Space4 only recently managed to break even after four years in business and has so far delivered more than 4,000 homes.

Persimmon’s takeover of Beazer in 2001 saw it offload the two Torwood timber frame factories acquired in the deal.

&#8220Westbury is an attractive business that will benefit from Persimmon’s proven track record for integrating acquisitions and operational excellence”

Duncan Davidson, Persimmon chairman

Persimmon chairman Duncan Davidson said: “Westbury is an attractive business that will benefit from Persimmon’s proven track record for integrating acquisitions and operational excellence.”

Westbury chairman Geoffrey Maddrell said the company’s progressive strategy, strong land bank and innovative product range had maintained Westbury’s position as a leading UK housebuilder during the past 10 years.

He added: “Persimmon’s proposal offers our shareholders definitive value, at a substantial premium to net asset value, which the Westbury Board believes is in the best interests of shareholders to accept.”

Westbury has been a rumoured takeover target since it recently reported a 26% fall in interim profits to £45.5m.