Merger with George Wimpey Plc

Taylor Woodrow PLC 26 March 2007 Not for release, publication, or distribution in or into Canada, Australia, or Japan 26 March 2007 PROPOSED MERGER OF TAYLOR WOODROW AND GEORGE WIMPEY TO CREATE TAYLOR WIMPEY, THE LARGEST UK HOUSEBUILDER The Boards of Taylor Woodrow plc ('Taylor Woodrow') and George Wimpey Plc ('George Wimpey') are pleased to announce today that they have reached agreement on the terms of a recommended all-share merger (the 'Merger') to create Taylor Wimpey plc ('Taylor Wimpey'). Taylor Wimpey will be the UK's largest housebuilding group with combined pro forma annual revenues of over Â£6.7 billion, total UK house completions of approximately 22,000 per annum, total North American house completions of approximately 9,000 per annum and a combined market capitalisation of approximately Â£5 billion. Summary The Merger will enhance shareholder value by creating a business with a strong strategic position in both the UK and the chosen markets in North America. The Combined Group has a pro forma landbank of over 92,000 plots in the UK and will be strengthened in the US through the combination of operations across some of the most attractive US markets. In addition, shareholders of the Combined Group will also benefit from enhanced profitability through the delivery of significant cost savings. The Combined Group is expected to benefit from: Margin growth in the UK, driven by: â€¢ The cost efficiency and business structure of the George Wimpey business â€¢ The strategic land development skills of the Taylor Woodrow business â€¢ Reducing the dependence on a high sales rate Economies of scale in the UK: â€¢ Opportunity for improved procurement terms and the ability to drive further savings from the supply chain â€¢ Overhead efficiency, created by a larger business with a lean UK housing head office and decentralised structure â€¢ An improved ability to take through the planning process and develop significant parcels of land, enhancing the value created Growth in the North American housing market through: â€¢ Enhanced strength in key states, notably Florida, California, Arizona, and Texas, where both groups have highly complementary operations â€¢ A broader offering to the market through the Taylor Woodrow brand, and the mid-market through George Wimpey's Morrison Homes brand â€¢ The strength of a significant combined land developer and housebuilder, with pro forma North American completions of approximately 9,000 per annum â€¢ Greater ability to deploy capital from a strong balance sheet, as market conditions permit Synergies of at least Â£70 million per annum: â€¢ The Combined Group will focus on driving out costs from the combined operations. This is expected to lead to at least Â£70 million of pre-tax synergies by the end of the first full financial year following the Effective Date, at a one-off cost of approximately Â£60 million, the majority of which will be incurred in the current financial year â€¢ These synergies are in addition to previously announced cost savings of Â£25 million in George Wimpey's UK business, and combined savings in excess of US$20 million in the US in 2007 The Combined Group will benefit from a strong balance sheet, which will enable it to drive growth in both the UK and the US. It is expected that following the Merger, and consistent with the enhanced growth profile, the Combined Group will follow a progressive dividend policy which balances returns to shareholders with the need to retain sufficient funds to drive growth. Governance and management The Boards of Taylor Woodrow and George Wimpey have agreed a unified management team under the leadership of Peter Redfern as Chief Executive. Reporting to Peter Redfern will be Peter Johnson as Finance Director, Ian Sutcliffe as UK CEO, and John Landrum as North American President. This executive team will sit on the Board, which will be chaired by Norman Askew with equal non-executive director representation from Taylor Woodrow and George Wimpey. David Williams will be the Senior Independent Director, and the Non-Executive Directors will be Mike Davies, Brenda Dean, Andrew Dougal, Katherine Innes Ker and Anthony Reading. Merger terms The Exchange Ratio shall be calculated on the basis of the issued share capital of Taylor Woodrow immediately prior to the posting of the Scheme Document so as to provide George Wimpey Shareholders (on a fully diluted basis) with such number of New Taylor Woodrow Shares as would result in Taylor Woodrow Shareholders holding 51 per cent., and George Wimpey Shareholders (on a fully diluted basis) holding 49 per cent., of the issued share capital of Taylor Wimpey. In addition, those Taylor Woodrow Shareholders who are on the register of Taylor Woodrow Shareholders as at close of business on 25 May 2007 will be entitled to receive and retain the Taylor Woodrow final dividend of 9.75 pence per Taylor Woodrow Share in respect of the year ended 31 December 2006, payable on 2 July 2007. Similarly, those George Wimpey Shareholders who were on the register of George Wimpey Shareholders as at close of business on 2 March 2007 will be entitled to receive and retain the George Wimpey final dividend of 13.10 pence per George Wimpey Share in respect of the year ended 31 December 2006, payable on 11 May 2007. The final George Wimpey and Taylor Woodrow dividends for the year ended 31 December 2006 are subject to usual shareholder approval at their respective Annual General Meetings. The Merger is subject to the conditions and terms set out in the attached announcement, and to be included in the Scheme Document, including, inter alia, the sanction of the Court and the approval of the shareholders of both Taylor Woodrow and George Wimpey. The Merger is expected to complete in the summer of 2007. The Merger is expected to be earnings enhancing for both Taylor Woodrow Shareholders and George Wimpey Shareholders in the first full financial year following the Effective Date, including synergies, excluding one-off costs.(1) Commenting on the Merger, Norman Askew, Chairman of Taylor Woodrow, said: 'This Merger provides both businesses with a unique opportunity to combine their respective strengths to create the largest UK housebuilder with a much improved position in the US, taking advantage of its medium and long term growth prospects. With Peter Redfern and the rest of the management team, John and I believe we have the balance of skills and commitment to drive growth and deliver enhanced value to shareholders. It is the intention to execute our integration plan as soon as practically possible in order to minimise disruption and add maximum value to the businesses and operations of the Combined Group.' Commenting on the Merger, John Robinson, Chairman of George Wimpey, said: 'The Board of George Wimpey believes that the combination with Taylor Woodrow presents exciting opportunities to our shareholders and employees alike, and we unanimously recommend it to all our stakeholders. In addition, Norman and I would like to take this opportunity to thank all of Taylor Woodrow's and George Wimpey's employees for their valuable contribution to the businesses over the years. We would also like to thank Ian Smith for the significant part he has played in creating this exciting new company. I believe that going forward the Merger will create excellent opportunities for employees at all levels within the Combined Group.' This summary should be read in conjunction with the main body of the announcement. There will be a presentation to investors and analysts at 9:30 a.m. on Monday 26 March 2007 at JP Morgan Cazenove, 20 Moorgate, London EC2R 6DA. UBS Investment Bank is acting as lead financial adviser and joint-broker to Taylor Woodrow. Morgan Stanley is acting as joint financial adviser and joint-broker to Taylor Woodrow. JPMorgan Cazenove is acting as sole financial adviser and joint-broker to George Wimpey. Hoare Govett is acting as joint-broker to George Wimpey. Note: (1) Nothing in this announcement should be interpreted to mean that the future earnings per share of Taylor Wimpey will necessarily match or exceed the historical earnings per share of Taylor Woodrow or George Wimpey. Enquiries: Taylor Woodrow plc George Wimpey Plc Tel: +44 121 600 8520 Tel: +44 20 7963 6352 Ian Smith Peter Redfern Peter Johnson Andrew Carr-Locke UBS Investment Bank JPMorgan Cazenove (lead financial adviser and joint-broker to Taylor (sole financial adviser and joint-broker to George Woodrow) Wimpey) Tel: +44 20 7568 1000 Tel: +44 20 7588 2828 Aidan Clegg Mark Breuer Bill Hutchings Richard Cotton James Robertson Andrew Truscott Morgan Stanley Hoare Govett (joint financial adviser and joint-broker to Taylor (joint-broker to George Wimpey) Woodrow) Tel: +44 20 7425 8000 Tel: +44 20 7678 8000 Gavin MacDonald Antonia Rowan Jean-Eudes Renier Luke Simpson Peter Moorhouse Finsbury The Maitland Company (PR adviser to Taylor Woodrow) (PR adviser to George Wimpey) Tel: +44 20 7251 3801 Tel: +44 20 7379 5151 James Murgatroyd Liz Morley This summary should be read in conjunction with the full text of the following announcement and the Appendices. The conditions to and certain further terms of the Merger are set out in Appendix 1. The bases and sources of certain financial information contained in this announcement are set out in Appendix 2. Certain definitions and terms used in this announcement are set out in Appendix 3. UBS is acting as lead financial adviser and joint-broker to Taylor Woodrow, and no one else in connection with the Merger and will not be responsible to anyone other than Taylor Woodrow for providing the protections afforded to the clients of UBS nor for providing advice in relation to the Merger or any other matter referred to herein. Morgan Stanley is acting as joint financial adviser and joint-broker to Taylor Woodrow in respect of the Merger, and no one else in connection with the Merger and will not be responsible to anyone other than Taylor Woodrow for providing the protections afforded to the clients of Morgan Stanley nor for providing advice in relation to the Merger or any other matter referred to herein. JPMorgan Cazenove is acting as sole financial adviser and joint-broker to George Wimpey in connection with the Merger and will not be responsible to anyone other than George Wimpey for providing the protections afforded to the clients of JPMorgan Cazenove nor for providing advice in relation to the Merger or any other matter referred to herein. Hoare Govett is acting as joint-broker to George Wimpey, and no one else in connection with the Merger and will not be responsible to anyone other than George Wimpey for providing the protections afforded to the clients of Hoare Govett nor for providing advice in relation to the Merger or any other matter referred to herein. Overseas jurisdictions The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England. This announcement is not intended to, and does not constitute, or form part of, an offer to sell or an invitation to purchase or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction. This announcement does not constitute a prospectus or a prospectus equivalent document. Shareholders of Taylor Woodrow and George Wimpey are advised to read carefully the formal documentation in relation to the Merger once it has been despatched. The proposals of the Merger will be made solely through the Scheme Document, which will contain the full terms and conditions of the Scheme, including details of how to vote with respect to the Scheme. Any acceptance or other response to the proposals should be made only on the basis of the information in the Scheme Document. In particular, this announcement is not an offer of securities for sale in the United States and the New Taylor Woodrow Shares, which will be issued in connection with the Merger, have not been, and will not be, registered under the US Securities Act or under the securities law of any state, district or other jurisdiction of the United States, Australia, Canada or Japan and no regulatory clearance in respect of the New Taylor Woodrow Shares has been, or will be, applied for in any jurisdiction other than the UK. The New Taylor Woodrow Shares may not be offered, sold, or, delivered, directly or indirectly, in, into or from the United States absent registration under the US Securities Act or an exemption from registration. The New Taylor Woodrow Shares may not be offered, sold, resold, delivered or distributed, directly or indirectly, in, into or from Canada, Australia or Japan or to, or for the account or benefit of, any resident of Australia, Canada or Japan absent an exemption from registration or an exemption under relevant securities law. It is expected that the New Taylor Woodrow Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Under applicable US securities laws, persons (whether or not US persons) who are or will be 'affiliates' within the meaning of the US Securities Act of George Wimpey or Taylor Woodrow prior to, or of Taylor Wimpey after, the Effective Date will be subject to certain transfer restrictions relating to the New Taylor Woodrow Shares received in connection with the Scheme. Notice to US Investors in George Wimpey: The Merger relates to the shares of a UK company and is proposed to be made by means of a scheme of arrangement provided for under the laws of England and Wales. The Merger is subject to the disclosure requirements and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure and other requirements of US securities laws. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US companies. Copies of this announcement and any formal documentation relating to the Merger are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from Canada, Australia or Japan and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or sent it in or into or from Canada, Australia or Japan. If the Merger is implemented by way of an Offer, it will be made in accordance with the procedural and filing requirements of the US securities laws, to the extent applicable. If the Merger is implemented by way of an Offer, the New Taylor Woodrow Shares to be issued in connection with such Offer will not be registered under the US Securities Act or under the securities laws of any state, district or other jurisdiction of the United States and may not be offered, sold or delivered, directly or indirectly, in the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act or such other securities laws. Taylor Woodrow does not intend to register any such New Taylor Woodrow Shares or part thereof in the United States or to conduct a public offering of the New Taylor Woodrow Shares in the United States. Forward looking statements This announcement may contain forward looking statements that are based on current expectations or beliefs, as well as assumptions about future events. Generally, the words 'will', 'may', 'should', 'continue', 'believes', 'expects', 'intends', 'anticipates' or similar expressions identify forward-looking statements. These statements are based on the current expectations of management and are naturally subject to risks, uncertainties and changes in circumstances. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and management's plans and objectives, to differ materially from those expressed or implied in the forward looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward looking statements are the ability to combine successfully the businesses of Taylor Woodrow and George Wimpey and to realise expected synergies from that combination, changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. Neither Taylor Woodrow nor George Wimpey undertakes any obligation (except as required by the Listing Rules and the rules of the London Stock Exchange) to revise or update any forward looking statement contained in this announcement, regardless of whether that statement is affected as a result of new information, future events or otherwise. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, 'interested' (directly or indirectly) in one per cent. or more of any class of ' relevant securities' of Taylor Woodrow or George Wimpey, all 'dealings' in any ' relevant securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30 p.m. on the London business day following the date of the relevant transaction. This requirement will continue until the Scheme becomes Effective, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends (or, if the Merger is implemented by way of an Offer, until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends). If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of Taylor Woodrow or George Wimpey, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant securities' of Taylor Woodrow or George Wimpey by Taylor Woodrow or George Wimpey, or by any of their respective 'associates', must be disclosed by no later than 12.00 noon on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. 'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel. For immediate release Not for release, publication, or distribution in or into Canada, Australia, or Japan PART 1 26 March 2007 PROPOSED MERGER OF TAYLOR WOODROW AND GEORGE WIMPEY TO CREATE TAYLOR WIMPEY, THE LARGEST UK HOUSEBUILDER 1. Introduction The Boards of Taylor Woodrow plc ('Taylor Woodrow') and George Wimpey Plc (' George Wimpey') are pleased to announce that they have reached agreement on the terms of a recommended all-share merger to create Taylor Wimpey plc ('Taylor Wimpey'). Taylor Wimpey will be the UK's largest housebuilding group with combined pro forma annual revenues of over Â£6.7 billion, total UK house completions of approximately 22,000 per annum, total North American house completions of approximately 9,000 per annum and a combined market capitalisation of approximately Â£5 billion. 2. Rationale for the Merger The Boards of Taylor Woodrow and George Wimpey believe that the Merger has compelling strategic and financial logic for both companies. The Merger creates a combined business with significantly enhanced prospects in both the UK and the US and offers shareholders the opportunity to share in any value upside going forward. The Combined Group will be the leading UK housebuilder, in terms of completions, has a pro forma UK landbank of over 92,000 plots and will be strengthened in the US through the combination of highly complementary operations across some of the most attractive US markets. The principal benefits of the Merger include: - Margin growth in the UK The Combined Group will be better positioned to leverage the respective strengths of Taylor Woodrow and George Wimpey in order to accelerate an improvement in profitability. The key driver of this development will be ensuring that Taylor Woodrow's strategic land development skills are successfully coupled with George Wimpey's more efficient cost base and business structure. Under this structure, the Combined Group aims to accelerate actions to smooth its sales and completions profile whilst also focusing on the most attractive opportunities to deliver profitable growth. Furthermore, the Combined Group will enhance average selling prices by adjusting its business model in such a way so as to yield a lower sales rate per outlet and a reduction in the annual number of aggregate completions for the Combined Group versus the standalone businesses in order to maximise operating efficiency and deliver on its growth commitments. - Economies of scale in the UK The Merger should help secure the future growth of the Combined Group by enhancing its ability to buy and develop significant parcels of land. Through leveraging its increased scale, the Combined Group should be able to achieve improved procurement terms and conditions whilst maximising supply chain efficiency. The Combined Group will have a substantial, high quality and more balanced combination of current and strategic landbank, and will be better placed to succeed in a challenging planning environment in the UK. - Future recovery and growth in the North American housing market The Combined Group will benefit from the highly complementary nature of the two businesses across some of the most attractive high growth states in North America, particularly Florida, California, Arizona and Texas. The product portfolio of the Combined Group will be enhanced by the broader offering to the market through the Taylor Woodrow brand, and the mid-market through George Wimpey's Morrison Homes brand. In addition, the Combined Group will be better positioned to benefit from any market recovery and will have the financial flexibility to take advantage of acquisition opportunities as the cycle turns. - Synergies of at least Â£70 million per annum The Combined Group will focus on driving out costs from the combined operations by delivering on its efficiency targets, rationalising corporate costs and improving the collective procurement process. This is expected to lead to at least Â£70 million of pre-tax synergies by the end of the first full financial year following the Effective Date, at a one-off cost of around Â£60 million, the majority of which will be incurred in the current financial year. These synergies are in addition to the previously announced cost savings of Â£25 million in George Wimpey's UK business, and combined savings in excess of US$20 million in the US in 2007. - Balance sheet The Combined Group will benefit from a strong balance sheet that provides an improved financial platform to support future growth. This improved financial flexibility is expected to enable the Combined Group to enhance shareholder value and its growth profile through continued investment in land, whilst also allowing it to take advantage of acquisition opportunities that may arise in its different markets. The boards of Taylor Woodrow and George Wimpey have confidence in the strength of the Combined Group and believe that it will be better positioned to drive both growth and profitability going forward. The Merger is expected to be earnings enhancing for both Taylor Woodrow and George Wimpey Shareholders in the first full financial year following the Effective Date, including synergies, excluding one-off costs.(2) 3. Merger terms The Merger is to be effected by way of a scheme of arrangement of George Wimpey and will be subject to the terms and conditions set out below and in Appendix I and to be set out in the Scheme Document. However, Taylor Woodrow and George Wimpey reserve the right to implement the Merger by way of Taylor Woodrow making an Offer for the entire issued and to be issued share capital of George Wimpey instead. The Exchange Ratio shall be calculated on the basis of the issued share capital of Taylor Woodrow immediately prior to the posting of the Scheme Document so as to provide George Wimpey Shareholders (on a fully diluted basis) with such number of New Taylor Woodrow Shares as would result in Taylor Woodrow Shareholders holding 51 per cent. and George Wimpey Shareholders (on a fully diluted basis) holding 49 per cent. of the issued share capital of Taylor Wimpey. Those Taylor Woodrow Shareholders who are on the register of Taylor Woodrow Shareholders as at close of business on 25 May 2007 will be entitled to receive and retain the Taylor Woodrow final dividend of 9.75 pence per Taylor Woodrow Share in respect of the year ended 31 December 2006, payable on 2 July 2007. Similarly, those George Wimpey Shareholders who were on the register of George Wimpey Shareholders as at close of business on 2 March 2007 will be entitled to receive and retain the George Wimpey final dividend of 13.10 pence per George Wimpey Share in respect of the year ended 31 December 2006, payable on 11 May 2007. The final George Wimpey and Taylor Woodrow dividends for the year ended 31 December 2006 are subject to usual shareholder approval at their respective Annual General Meetings. The New Taylor Woodrow Shares will be issued credited as fully paid and will rank pari passu in all respects with the Taylor Woodrow Shares in issue at the time the New Taylor Woodrow Shares are delivered pursuant to the Merger, including the right to receive and retain dividends and other distributions (if any) paid by reference to a record date after the Effective Date. Applications will be made to the UK Listing Authority for the New Taylor Woodrow Shares to be admitted to the Official List and to the London Stock Exchange for the New Taylor Woodrow Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. The George Wimpey Shares will be acquired under the Merger fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature and together with all rights now or hereafter attaching to them, save for, in the case of dividends, the George Wimpey final dividend of 13.10 pence per George Wimpey Share for the year ended 31 December referred to above. The Scheme requires the approval of a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders present and voting, either in person or by proxy at the Scheme Meeting and the passing of the resolutions necessary to implement the Scheme at the George Wimpey Extraordinary General Meeting. Note: (2) Nothing in this announcement should be interpreted to mean that the future earnings per share of Taylor Wimpey will necessarily match or exceed the historical earnings per share of Taylor Woodrow or George Wimpey. Following the Scheme Meeting, the George Wimpey Extraordinary General Meeting and the satisfaction (or, where applicable, waiver) of the other Conditions, the Scheme must also be sanctioned by the Court and the associated Capital Reduction must be confirmed by the Court, in each case at the relevant Court Hearings. Fractions of New Taylor Woodrow Shares will not be allotted or issued pursuant to the Scheme. Fractional entitlements to New Taylor Woodrow Shares will be aggregated and sold in the market and the net proceeds of sale distributed pro rata to persons entitled thereto. 4. Recommendation The directors of George Wimpey, who have been so advised by JPMorgan Cazenove, consider the terms of the Merger to be fair and reasonable. In providing advice to the directors of George Wimpey, JPMorgan Cazenove has taken into account the commercial assessments of the directors of George Wimpey. Accordingly, the directors of George Wimpey have unanimously agreed to recommend that George Wimpey Shareholders vote in favour of the resolutions relating to the Merger to be proposed at the Scheme Meeting and the George Wimpey Extraordinary General Meeting, as they have undertaken to do in respect of their own beneficial holdings of 300,108 George Wimpey Shares representing, in aggregate, approximately 0.08 per cent. of the existing issued share capital of George Wimpey. The directors of Taylor Woodrow, who have received financial advice from UBS and Morgan Stanley, consider the terms of the Merger to be fair and reasonable. In providing advice to the directors of Taylor Woodrow, UBS and Morgan Stanley have relied on the commercial assessments of the directors of Taylor Woodrow. The directors of Taylor Woodrow consider the Merger to be in the best interests of Shareholders and, accordingly, have unanimously agreed to recommend that Taylor Woodrow Shareholders vote in favour of the resolutions to be proposed at the Taylor Woodrow Extraordinary General Meeting relating to the Merger as they have undertaken to do in respect of their own beneficial holdings of 126,159 Taylor Woodrow Shares representing, in aggregate, approximately 0.03 per cent. of the existing issued share capital of Taylor Woodrow. 5. Irrevocable undertakings The undertakings given by directors of George Wimpey (described in paragraph 4 above) will cease to be binding if: (i) the Scheme Document is not posted to George Wimpey Shareholders within 28 days (or such longer date as the Panel may agree) after the date of this announcement; (ii) the Scheme lapses or is withdrawn; or (iii) the Scheme has not become effective by 6.00 pm on the Long Stop Date. The undertakings given by the directors of Taylor Woodrow (described in paragraph 4 above) will cease to be binding if: (i) the Scheme document is not posted to George Wimpey Shareholders within 28 days (or such longer date that the Panel may agree) after the date of this announcement; (ii) the Scheme lapses or is withdrawn; or (iii) the Scheme has not become effective by 6.00 pm on the Long Stop Date. Further details on the irrevocables can be found in Appendix 4. 6. Change of name It is intended that a resolution to change the name of Taylor Woodrow to Taylor Wimpey, to take effect on completion of the Merger, will be put to Taylor Woodrow Shareholders at the Taylor Woodrow Extraordinary General Meeting. 7. Key management and board of directors of Taylor Wimpey Key management and the board of directors of Taylor Wimpey will be drawn from a combination of the current teams within both Taylor Woodrow and George Wimpey as follows: Board of directors of Taylor Wimpey Norman Askew, Chairman (Taylor Woodrow) Peter Redfern, Chief Executive (George Wimpey) Peter Johnson, Finance Director (Taylor Woodrow) Ian Sutcliffe, UK Chief Executive (George Wimpey) John Landrum, North American President (Taylor Woodrow) David Williams, Senior Independent Director (George Wimpey) Mike Davies, Non-Executive Director (Taylor Woodrow) Brenda Dean, Non-Executive Director (George Wimpey) Andrew Dougal, Non-Executive Director (Taylor Woodrow) Katherine Innes Ker, Non-Executive Director (Taylor Woodrow) Anthony Reading, Non-Executive Director (George Wimpey) 8. Information on Taylor Woodrow Taylor Woodrow has been building homes since 1921 and has operations in the UK, North America, Spain, and Gibraltar, and is engaged in residential and mixed use property development. Taylor Woodrow's product range spans from affordable to executive homes and includes lifestyle communities and luxury second homes. For the year ended 31 December 2006, the Taylor Woodrow Group reported turnover of Â£3,572.1 million (excluding joint ventures), operating profit of Â£469.8 million, pre-tax profit of Â£405.6 million and net income of Â£290.6 million. Taylor Woodrow reported net assets of 2,105.5 million as at 31 December 2006. For the year ended 31 December 2006, the Taylor Woodrow Group effected 13,165 home completions (out of which 8,294 were in the UK and 4,492 were in North America), with an average selling price of Â£207,000. As at 31 December 2006, the Taylor Woodrow Group had a total landbank of 68,662 plots, out of which 34,827 were in the UK, 31,353 were in North America and 2,482 were in Spain and Gibraltar. This equates to 4.2 years of supply in the UK and 4.4 years of supply in North America at 2006 volumes. 9. Information on George Wimpey George Wimpey has been building homes for over 125 years and is the parent of a group of dedicated housebuilding companies with operations throughout the UK and the US. George Wimpey's residential offerings range from apartments for first time buyers to compact townhomes to large detached family homes. For the year ended 31 December 2006, the George Wimpey Group reported turnover of Â£3,147.4 million (excluding joint ventures), operating profit before exceptional items of Â£422.8 million, pre-tax profit pre exceptional items of Â£370.9 million and net income pre exceptional items of Â£256.0 million. George Wimpey reported net assets of Â£1,707.1 million as at 31 December 2006. In 2006, the George Wimpey Group effected 17,963 completions (out of which 13,616 were in the UK and 4,347 were in the US), with an average selling price of Â£175,400 in the UK and an average selling price of $319,600 in the US. As at 31 December 2006, the George Wimpey Group had a landbank of 76,736 plots, out of which 57,999 were in the UK and 18,737 were in the US. This equates to 4.3 years worth of supply at 2006 volumes. 10. Current trading The Boards of Taylor Woodrow and George Wimpey confirm that their respective businesses continue to trade in line with the guidance given at the time of the preliminary results for the financial year ended 31 December 2006. Taylor Woodrow As announced by Norman Askew, Taylor Woodrow Chairman, on 20 February 2007: 'We have delivered a robust performance in 2006 and the increase in the full year dividend of 10 per cent maintains our progressive dividend policy.' As announced by Ian Smith, Taylor Woodrow Chief Executive, on 20 February 2007: 'My initial review of Taylor Woodrow's operations has confirmed my impression of a business with strong potential for growth in the medium term. The UK has delivered in line with expectations in 2006. We have a number of initiatives in place to improve our performance and this will be our UK management team's key focus. In North America, we have achieved an excellent performance in 2006 as a result of the strategy of maximising forward sales during 2005. We continue to be confident in the prospects for the business in the medium-term, but expect to see significant reductions in both operating margin and return on capital employed during 2007.' George Wimpey As announced by John Robinson, Chairman of George Wimpey, on 21 February 2007: 'We have continued to build on the strong progress made during the first half of 2006. I am delighted with the advances made by our UK business which have offset the effect of market weakness in the US. We have taken the necessary steps to ensure our US business is in the best possible position to benefit as the market returns to stability.' As announced by Peter Redfern, Chief Executive of George Wimpey, on 21 February 2007: 'As promised last year we have taken the firm actions required in the UK to deliver improved results. The change in focus has delivered margin growth ahead of expectations in the second half of 2006. With a strong land position, an established cost reduction programme and a record order book we are confident of margin growth going forward.' 11. Dividend policy Following the Merger, and consistent with the enhanced growth strategy, it is expected that the Combined Group will follow a progressive dividend policy which balances returns to shareholders with the need to retain sufficient funds to drive growth. 12. Management and employees The Boards of Taylor Woodrow and George Wimpey have confirmed to each other that, following the Scheme becoming Effective, the existing employment rights, including pension rights, of all employees of both Taylor Woodrow and George Wimpey will be fully safeguarded. 13. George Wimpey Share Schemes Appropriate proposals will be made in due course to participants in the George Wimpey Share Schemes. Details of these proposals will be set out in the Scheme Document or, as the case may be, the Offer Document, and in separate letters to be sent to participants in the George Wimpey Share Schemes. 14. Merger Agreement Taylor Woodrow and George Wimpey have entered into a Merger Agreement in relation to the Merger which contains provisions regarding the implementation of the Merger and certain assurances and confirmations between the parties (including terms regarding the conduct of the businesses pending completion of the Merger). Non-solicitation arrangements Taylor Woodrow and George Wimpey have undertaken, amongst other things, not to, and to procure that members of the Taylor Woodrow Group and the George Wimpey Group and their respective directors, management and professional advisers shall not, solicit, induce or initiate an Independent Competing Transaction. Taylor Woodrow and George Wimpey have also undertaken to notify the other immediately of any approach that is made to it or any other member of its group or its directors, employees, advisers or agents in relation to an Independent Competing Transaction and the material terms of such transaction and to keep the other party informed as to the progress of such approach. Break Fee arrangements Taylor Woodrow has agreed to pay George Wimpey a break fee of Â£24,469,000 (or, in the case of the circumstance referred to in the fourth bullet point below, Â£12,234,500 (in each case inclusive of irrecoverable VAT) on the first to occur of the following: â€¢ an Independent Competing Transaction for Taylor Woodrow is announced (whether or not on a pre-conditional basis) and the directors of Taylor Woodrow announce their intention to or recommend that Taylor Woodrow Shareholders accept such transaction; â€¢ an Independent Competing Transaction for Taylor Woodrow is announced (whether or not on a pre-conditional basis) and such transaction becomes or is declared wholly unconditional or is otherwise completed; â€¢ the recommendation by the directors of Taylor Woodrow to the Taylor Woodrow Shareholders to vote in favour of the resolutions proposed at the Taylor Woodrow Extraordinary General Meeting, at or prior to such meeting, is not provided in the Taylor Woodrow Circular, withdrawn, qualified or adversely amended; â€¢ the Taylor Woodrow Shareholders fail to pass the resolutions proposed at the Taylor Woodrow Extraordinary General Meeting; or â€¢ George Wimpey terminates the Merger Agreement in accordance with its terms following a breach by Taylor Woodrow of a term of the Merger Agreement which has a material adverse effect on the Merger or its implementation. George Wimpey has agreed to pay Taylor Woodrow a break fee of Â£24,469,000 or, in the case of the circumstances referred to in the fourth bullet point below, Â£12,234,500 (in each case inclusive of irrecoverable VAT) on the first to occur of the following: â€¢ an Independent Competing Transaction for George Wimpey is announced (whether or not on a pre-conditional basis) and the directors of George Wimpey announce their intention to or recommend that George Wimpey Shareholders accept such transaction; â€¢ an Independent Competing Transaction for George Wimpey is announced (whether or not on a pre-conditional basis) and such transaction becomes or is declared wholly unconditional or is otherwise completed; â€¢ the recommendation by the directors of George Wimpey to the George Wimpey Shareholders to vote in favour of the resolutions to implement the Scheme at the Scheme Meeting or the George Wimpey Extraordinary General Meeting is not provided in the Scheme Document, withdrawn, qualified or adversely amended; â€¢ the Scheme Shareholders fail to approve the Scheme at the Scheme Meeting or George Wimpey Shareholders fail to approve the resolutions proposed at the George Wimpey Extraordinary General Meeting; or â€¢ Taylor Woodrow terminates the Merger Agreement in accordance with its terms following a breach by George Wimpey of a term of the Merger Agreement which has a material adverse effect on the Merger or its implementation. 15. Scheme of arrangement It is intended that the Merger will be effected by means of a Court-sanctioned scheme of arrangement between George Wimpey and its shareholders under section 425 of the Companies Act. The Scheme will involve an application by George Wimpey to the Court to sanction the Scheme. The Scheme will be subject to the Conditions and certain further terms referred to in Appendix 1 to this announcement and to be included in the Scheme Document. In particular, to become Effective, the Scheme requires the approval of Scheme Shareholders by the passing of a resolution at the Scheme Meeting. The resolution must be approved by a majority in number present and voting, either in person or by proxy, representing not less than 75 per cent. in value of the Scheme Shares which are voted at the Scheme Meeting (or any adjournment thereof). To become Effective, the Scheme also requires the passing of the resolutions necessary to implement the Scheme at the George Wimpey Extraordinary General Meeting, requiring the approval of the George Wimpey Shareholders representing at least 75 per cent. of the votes cast at the George Wimpey Extraordinary General Meeting, which will be held immediately after the Scheme Meeting. Following the Scheme Meeting and the George Wimpey Extraordinary General Meeting, the Scheme must be sanctioned and the Capital Reduction confirmed by the Court, and will only become effective on delivery to the Registrar of Companies of: â€¢ a copy of the First Court Order; and â€¢ a copy of the Second Court Order, and in the case of the Second Court Order, it being registered by the Registrar of Companies. Upon the Scheme becoming Effective, it will be binding on all George Wimpey Shareholders, irrespective of whether or not they attended or voted at the Scheme Meeting or the George Wimpey Extraordinary General Meeting. The Scheme Document will include full details of the Scheme, together with notices of the Scheme Meeting and the George Wimpey Extraordinary General Meeting and the expected timetable, and will specify the action to be taken by Scheme Shareholders. Taylor Woodrow and George Wimpey reserve the right to decide to implement the Merger by way of Taylor Woodrow making an Offer for the entire issued and to be issued share capital of George Wimpey. The directors of George Wimpey have confirmed that, in the event that the Merger is implemented by way of Offer, the directors of George Wimpey will recommend, on a unanimous and unqualified basis, that George Wimpey Shareholders accept the Offer except to the extent that the directors of George Wimpey determine in good faith (having taken appropriate legal and financial advice) that such unanimous and unqualified recommendation should not be given or should be withdrawn or modified in compliance with their fiduciary duties. 16. Taylor Woodrow Shareholder approval and Prospectus As a result of the size of the transaction, the Merger constitutes a Class 1 transaction (as defined in the Listing Rules) for Taylor Woodrow. Accordingly, Taylor Woodrow will be required to seek the approval of the Taylor Woodrow Shareholders for the Merger at the Taylor Woodrow Extraordinary General Meeting. Taylor Woodrow is required to prepare and send to the Taylor Woodrow Shareholders a circular summarising the background to and reasons for the Merger (which will include a notice convening the Taylor Woodrow Extraordinary General Meeting). The Merger is conditional on, amongst other things, the requisite resolutions being passed by the Taylor Woodrow Shareholders at the Taylor Woodrow Extraordinary General Meeting. Taylor Woodrow will also be required to publish the Prospectus in connection with the issue of the New Taylor Woodrow Shares. The Prospectus will contain information relating to the Combined Group and the New Taylor Woodrow Shares. 17. Overseas shareholders The availability of New Taylor Woodrow Shares under the terms of the Merger to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. Such persons should inform themselves about and observe any applicable requirements. Further details in relation to overseas shareholders will be contained in the Scheme Document. 18. Interest in shares As at the close of business on 23 March 2007, being the latest practicable date prior to the date of this announcement, neither Taylor Woodrow nor any director of Taylor Woodrow, nor, so far as Taylor Woodrow is aware, any party acting in concert with Taylor Woodrow, owns or controls any George Wimpey Shares or any securities convertible or exchangeable into, or any rights to subscribe for or purchase, or any options to purchase any George Wimpey Shares or holds any derivatives referenced to George Wimpey Shares. In the interests of confidentiality, Taylor Woodrow has not made any enquiries in this respect of certain parties who may be presumed by the Panel to be acting in concert with it for the purposes of the Merger. 19. Securities in issue In accordance with Rule 2.10 of the City Code, as at close of business on 23 March 2007, being the last Business Day prior to this announcement, Taylor Woodrow had 581,917,049 ordinary shares of 25 pence each in issue (ISIN number GB0008782301) and George Wimpey had 400,963,763 ordinary shares of 25 pence each in issue (ISIN number GB0009713446). 20. Delisting and re-registration It is intended that the London Stock Exchange and the UKLA will be requested respectively to cancel trading in George Wimpey Shares on the London Stock Exchange's main market for listed securities and the listing of the George Wimpey Shares from the Official List on the Effective Date. As soon as possible after the Effective Date, it is intended that George Wimpey be re-registered as a private limited company. If the Merger is effected by way of an Offer, it is anticipated that the cancellation of George Wimpey's listing and admission to trading will take effect no earlier than 20 Business Days after the date on which the Offer becomes or is declared unconditional in all respects. Delisting would significantly reduce the liquidity and marketability of any George Wimpey Shares not assented to the Offer at that time. If the Merger is effected by way of an Offer and such Offer becomes or is declared unconditional in all respects and sufficient acceptances are received, Taylor Woodrow intends to exercise its rights to acquire compulsorily the remaining George Wimpey Shares in respect of which the Offer has not been accepted. 21. General and documentation The Merger will be governed by English law and will be subject to the jurisdiction of the English courts. The Merger will be subject to the Conditions and further terms set out herein and in Appendix 1 and to the full terms and conditions which will be set out in the Scheme Document. The bases and sources of certain financial information contained in this announcement, as well as some additional financial and operational information, are set out in Appendix 2. Certain definitions and terms used in this announcement are set out in Appendix 3. The Prospectus and Scheme Document will be sent to George Wimpey Shareholders other than certain overseas shareholders in due course. At the same time or as nearly as practicable at the same time as these documents are sent to George Wimpey Shareholders, the Prospectus and the Taylor Woodrow Shareholder Circular convening the Taylor Woodrow Extraordinary General Meeting will be sent to Taylor Woodrow Shareholders. Enquiries: Taylor Woodrow plc George Wimpey Plc Tel: +44 121 600 8520 Tel: +44 20 7963 6352 Ian Smith Peter Redfern Peter Johnson Andrew Carr-Locke UBS Investment Bank JPMorgan Cazenove (lead financial adviser and joint-broker to Taylor (sole financial adviser and joint-broker to George Woodrow) Wimpey) Tel: +44 20 7568 1000 Tel: +44 20 7588 2828 Aidan Clegg Mark Breuer Bill Hutchings Richard Cotton James Robertson Andrew Truscott Morgan Stanley Hoare Govett (joint financial adviser and joint-broker to Taylor (joint-broker to George Wimpey) Woodrow) Tel: +44 20 7425 8000 Tel: +44 20 7678 8000 Gavin MacDonald Antonia Rowan Jean-Eudes Renier Luke Simpson Peter Moorhouse Finsbury The Maitland Company (PR adviser to Taylor Woodrow) (PR adviser to George Wimpey) Tel: +44 20 7251 3801 Tel: +44 20 7379 5151 James Murgatroyd Liz Morley UBS is acting as lead financial adviser and joint-broker to Taylor Woodrow, and no one else in connection with the Merger and will not be responsible to anyone other than Taylor Woodrow for providing the protections afforded to the clients of UBS nor for providing advice in relation to the Merger or any other matter referred to herein. Morgan Stanley is acting as joint financial adviser and joint-broker to Taylor Woodrow in respect of the Merger, and no one else in connection with the Merger and will not be responsible to anyone other than Taylor Woodrow for providing the protections afforded to the clients of Morgan Stanley nor for providing advice in relation to the Merger or any other matter referred to herein. JPMorgan Cazenove is acting as sole financial adviser and joint-broker to George Wimpey in connection with the Merger and will not be responsible to anyone other than George Wimpey for providing the protections afforded to the clients of JPMorgan Cazenove nor for providing advice in relation to the Merger or any other matter referred to herein. Hoare Govett is acting as joint-broker to George Wimpey, and no one else in connection with the Merger and will not be responsible to anyone other than George Wimpey for providing the protections afforded to the clients of Hoare Govett nor for providing advice in relation to the Merger or any other matter referred to herein. Overseas jurisdictions The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England. This announcement is not intended to, and does not constitute, or form part of, an offer to sell or an invitation to purchase or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction. This announcement does not constitute a prospectus or a prospectus equivalent document. Shareholders of Taylor Woodrow and George Wimpey are advised to read carefully the formal documentation in relation to the Merger once it has been despatched. The proposals of the Merger will be made solely through the Scheme Document, which will contain the full terms and conditions of the Scheme, including details of how to vote with respect to the Scheme. Any acceptance or other response to the proposals should be made only on the basis of the information in the Scheme Document. In particular, this announcement is not an offer of securities for sale in the United States and the New Taylor Woodrow Shares, which will be issued in connection with the Merger, have not been, and will not be, registered under the US Securities Act or under the securities law of any state, district or other jurisdiction of the United States, Australia, Canada or Japan and no regulatory clearance in respect of the New Taylor Woodrow Shares has been, or will be, applied for in any jurisdiction other than the UK. The New Taylor Woodrow Shares may not be offered, sold,, or delivered, directly or indirectly, in, into or from the United States absent registration under the US Securities Act or an exemption from registration. The New Taylor Woodrow Shares may not be offered, sold, resold, delivered or distributed, directly or indirectly, in, into or from Canada, Australia or Japan or to, or for the account or benefit of, any resident of Australia, Canada or Japan absent an exemption from registration or an exemption under relevant securities law. It is expected that the New Taylor Woodrow Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Under applicable US securities laws, persons (whether or not US persons) who are or will be 'affiliates' within the meaning of the US Securities Act of George Wimpey or Taylor Woodrow prior to, or of Taylor Wimpey after, the Effective Date will be subject to certain transfer restrictions relating to the New Taylor Woodrow Shares received in connection with the Scheme. Notice to US Investors in George Wimpey: The Merger relates to the shares of a UK company and is proposed to be made by means of a scheme of arrangement provided for under the laws of England and Wales. The Merger is subject to the disclosure requirements and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure and other requirements of US securities laws. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US companies. Copies of this announcement and any formal documentation relating to the Merger are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from Canada, Australia or Japan and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or sent it in or into or from the Canada, Australia or Japan. If the Merger is implemented by way of an Offer, it will be made in accordance with the procedural and filing requirements of the US securities laws, to the extent applicable. If the Merger is implemented by way of an Offer, the New Taylor Woodrow Shares to be issued in connection with such Offer will not be registered under the US Securities Act or under the securities laws of any state, district or other jurisdiction of the United States and may not be offered, sold or delivered, directly or indirectly, in the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act or such other securities laws. Taylor Woodrow does not intend to register any such New Taylor Woodrow Shares or part thereof in the United States or to conduct a public offering of the New Taylor Woodrow Shares in the United States. Forward looking statements This announcement may contain forward looking statements that are based on current expectations or beliefs, as well as assumptions about future events. Generally, the words 'will', 'may', 'should', 'continue', 'believes', 'expects', 'intends', 'anticipates' or similar expressions identify forward-looking statements. These statements are based on the current expectations of management are naturally subject to risks, uncertainties and changes in circumstances. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and management's plans and objectives, to differ materially from those expressed or implied in the forward looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward looking statements are the ability to combine successfully the businesses of Taylor Woodrow and George Wimpey and to realise expected synergies from that combination, changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. Neither Taylor Woodrow nor George Wimpey undertakes any obligation (except as required by the Listing Rules and the rules of the London Stock Exchange) to revise or update any forward looking statement contained in this announcement, regardless of whether that statement is affected as a result of new information, future events or otherwise. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, 'interested' (directly or indirectly) in one per cent. or more of any class of ' relevant securities' of Taylor Woodrow or George Wimpey, all 'dealings' in any ' relevant securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30 p.m. on the London business day following the date of the relevant transaction. This requirement will continue until the Scheme becomes Effective, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends (or, if the Merger is implemented by way of an Offer, until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends). If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of Taylor Woodrow or George Wimpey, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant securities' of Taylor Woodrow or George Wimpey by Taylor Woodrow or George Wimpey, or by any of their respective 'associates', must be disclosed by no later than 12.00 noon on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. 'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel. APPENDIX 1 CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION The Merger will be conditional upon the Scheme becoming unconditional and Effective by the Long Stop Date. PART A Conditions of the Merger 1 The Scheme will be subject to the following conditions: a) its approval by a majority in number representing not less than three-fourths in value of the holders of Scheme Shares, present and voting, whether in person or by proxy, at the Scheme Meeting (or any adjournment thereof); b) the resolutions required to implement the Scheme being passed at the George Wimpey Extraordinary General Meeting (or any adjournment thereof); and c) the sanction of the Scheme and the confirmation of the Capital Reduction by the Court (in either case with or without modification (but subject to such modification being acceptable to Taylor Woodrow and George Wimpey)), office copies of the Court Orders and of the minute of reduction being delivered to the Registrar of Companies and registration of the Second Court Order confirming the Capital Reduction with the Registrar of Companies. 2 The Merger will be conditional upon the passing at the Taylor Woodrow Extraordinary General Meeting (or any adjournment thereof) of such resolution or resolutions as are necessary to approve, implement and effect the Merger and the acquisition of George Wimpey Shares pursuant to the Merger or otherwise (as such resolutions may be set out in the Taylor Woodrow Shareholder Circular, including a resolution or resolutions to increase the share capital of Taylor Woodrow and authorise the creation and allotment of the New Taylor Woodrow Shares). 3 Taylor Woodrow and George Wimpey have agreed that, subject to the provisions of paragraph 5 of this Part A below and the requirements of the Panel in accordance with the City Code, the Scheme will also be conditional upon, and accordingly the necessary actions to make the Merger Effective will only be taken on, the satisfaction or, where relevant, waiver of the following Conditions: a) the Office of Fair Trading in the United Kingdom indicating, in terms reasonably satisfactory to Taylor Woodrow and George Wimpey, that the proposed Merger or any matter arising therefrom or related thereto will not be referred to the Competition Commission; b) the Admission becoming effective in accordance with the Listing Rules and the admission of such shares to trading becoming effective in accordance with the Admission and Disclosure Standards of the London Stock Exchange or, if Taylor Woodrow and George Wimpey so determine and subject to the consent of the Panel, the UKLA agreeing to admit such shares to the Official List and the London Stock Exchange agreeing to admit such shares to trading subject only to (i) the allotment of such shares and/or (ii) the Merger becoming Effective. c) except as (i) publicly announced in accordance with the Listing Rules by Taylor Woodrow or George Wimpey prior to 26 March, 2007, (ii) disclosed in the annual report and accounts of George Wimpey for the financial year ended 31 December 2006, or (iii) disclosed in the annual report and accounts of Taylor Woodrow for the financial year ended 31 December 2006, there being no provision of any agreement, arrangement, licence, permit or other instrument to which any member of the wider Taylor Woodrow Group or the wider George Wimpey Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, which in consequence of the Merger or the proposed acquisition of any shares or other securities in George Wimpey by the Taylor Woodrow Group or because of a change in the control or management of Taylor Woodrow or George Wimpey or otherwise, would or might reasonably be expected to result (in each case to an extent which is material in the context of the wider George Wimpey Group as a whole or the wider Taylor Woodrow Group as a whole) in: (i) any moneys borrowed by or any other indebtedness (actual or contingent) of, or grant available to any such member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited; (ii) any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests of any such member thereunder being terminated or modified or affected or any obligation or liability arising or any action being taken thereunder; (iii) any assets or interests of any such member being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged otherwise than in the ordinary course of business; (iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any such member; (v) the rights, liabilities, obligations or interests of any such member in, or the business of any such member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or affected; (vi) the value of any such member or its financial or trading position being prejudiced or adversely affected; (vii) any such member ceasing to be able to carry on business under any name under which it presently does so; or (viii) the creation of any liability, actual or contingent, by any such member, and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the wider Taylor Woodrow Group or the wider George Wimpey Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, would result in or would reasonably be expected to result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (viii) of this paragraph 3(c) (in each case to an extent which is material in the context of the wider Taylor Woodrow Group as a whole or the wider George Wimpey Group as a whole); d) no government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, trade agency, association, institution or any other body or person whatsoever in any jurisdiction (each a ' Third Party') having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or enacted or made any statute, regulation, decision or order, or having taken any other steps which would or would reasonably be expected to (in each case to an extent which is material in the context of the wider Taylor Woodrow Group as a whole or the wider George Wimpey Group as a whole): (i) require, prevent or delay the divestiture, or alter the terms envisaged for any proposed divestiture by any member of the wider Taylor Woodrow Group or any member of the wider George Wimpey Group of all or any portion of their respective businesses, assets or property or impose any material limitation on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective assets or properties or any material part thereof; (ii) require, prevent or delay the divestiture by any member of the wider Taylor Woodrow Group of any shares or other securities in George Wimpey; (iii) impose any limitation on, or result in a delay in, the ability of any member of the wider Taylor Woodrow Group or the wider George Wimpey Group directly or indirectly to acquire or to hold or to exercise effectively any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the wider George Wimpey Group or the wider Taylor Woodrow Group or to exercise management control over any such member; (iv) otherwise adversely affect the business, assets or profits of any member of the wider Taylor Woodrow Group or of any member of the wider George Wimpey Group; (v) make the Merger or its implementation or the acquisition or proposed acquisition by Taylor Woodrow or any member of the wider Taylor Woodrow Group of any shares or other securities in, or control of George Wimpey void, illegal and/or unenforceable under the laws of any jurisdiction, or otherwise directly or indirectly, restrain, restrict, prohibit, delay or otherwise materially interfere with the same, or impose additional conditions or obligations with respect thereto, or otherwise challenge or materially interfere therewith; (vi) require any member of the wider Taylor Woodrow Group or the wider George Wimpey Group to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the wider George Wimpey Group or the wider Taylor Woodrow Group owned by any third party; or (vii) result in any member of the wider Taylor Woodrow Group or the wider George Wimpey Group ceasing to be able to carry on business under any name under which it presently does so, and all applicable waiting and other time periods during which any such Third Party could institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any jurisdiction in respect of the Merger or the acquisition or proposed acquisition of any George Wimpey Shares having expired, lapsed or been terminated; e) all necessary filings or applications having been made in connection with the Merger and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Merger or the acquisition by any member of the wider Taylor Woodrow Group of any shares or other securities in, or control of, George Wimpey and all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals (collectively ' Consents') reasonably deemed necessary for or in respect of, the Merger or the proposed acquisition of any shares or other securities in, or control of, George Wimpey by any member of the wider Taylor Woodrow Group having been obtained in terms and in a form reasonably satisfactory to Taylor Woodrow and George Wimpey from all appropriate Third Parties or persons with whom any member of the wider Taylor Woodrow Group or the wider George Wimpey Group has entered into contractual arrangements, and all such Consents together with all material Consents reasonably necessary to carry on the business of any member of the wider Taylor Woodrow Group or the wider George Wimpey Group remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke or not to renew any of the same at the time at which the Merger otherwise becomes Effective and all necessary statutory or regulatory obligations in any jurisdiction having been complied with in all material respects; f) except as (i) publicly announced in accordance with the Listing Rules by Taylor Woodrow or George Wimpey prior to 26 March 2007, (ii) disclosed in the annual report and accounts of George Wimpey for the financial year ended 31 December 2006, (iii) disclosed in the annual report and accounts of Taylor Woodrow for the financial year ended 31 December 2006, or (iv) fairly disclosed by or on behalf of Taylor Woodrow or George Wimpey to the other prior to 26 March 2007, no member of the wider George Wimpey Group having, since 31 December 2006, and no member of the wider Taylor Woodrow Group having, since 31 December 2006: (i) save as between Taylor Woodrow and wholly-owned subsidiaries of Taylor Woodrow, or as between George Wimpey and wholly-owned subsidiaries of George Wimpey, or for Taylor Woodrow Shares issued pursuant to the exercise of options granted under the Taylor Woodrow Share Schemes, or for George Wimpey Shares issued pursuant to the exercise of options granted under the George Wimpey Share Schemes, issued, authorised or proposed the issue of additional shares of any class; (ii) save as between Taylor Woodrow and wholly-owned subsidiaries of Taylor Woodrow, or as between George Wimpey and wholly-owned subsidiaries of George Wimpey, or for the grant of options under the Taylor Woodrow Share Schemes or the George Wimpey Share Schemes, issued or agreed to issue, authorised or proposed the issue of securities convertible or exchangeable into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities; (iii) other than to another member of the Taylor Woodrow Group or the George Wimpey Group and save as provided for in respect of George Wimpey or Taylor Woodrow in this announcement, recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise; (iv) save pursuant to the Merger and save for intra-Taylor Woodrow Group or intra-George Wimpey Group transactions, merged or demerged with any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest which, in any case, is not in the ordinary course of business and is material in the context of the wider Taylor Woodrow Group taken as a whole or the wider George Wimpey Group taken as a whole; (v) save for intra-Taylor Woodrow Group or intra-George Wimpey Group transactions, made or authorised or proposed or announced an intention to propose any change in its loan capital; (vi) issued, authorised or proposed the issue of any debentures or (save for intra-Taylor Woodrow Group or intra-George Wimpey Group transactions), save in the ordinary course of business, incurred or increased any indebtedness or become subject to any guarantee or contingent liability, which in any case is material in the context of the wider Taylor Woodrow Group taken as a whole or the wider George Wimpey Group taken as a whole; (vii) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraph (i) above, made any other change to any part of its share capital; (viii) implemented, or authorised, proposed or announced its intention to implement, any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement which, in any case, is not in the ordinary course of business and is material in the context of the wider Taylor Woodrow Group taken as a whole or the wider George Wimpey Group taken as a whole, or entered into or changed the terms of any contract with any director or senior executive; (ix) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is or would be reasonably likely to be materially restrictive on the businesses of the wider George Wimpey Group or the wider Taylor Woodrow Group taken as a whole or which involves or could involve an obligation of such a nature or magnitude or which is other than in the ordinary course of business, and in each such case is or would be reasonably likely to be material in the context of the wider George Wimpey Group taken as a whole or the wider Taylor Woodrow Group taken as a whole; (x) (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or had any such person appointed; (xi) entered into any contract, transaction or arrangement which would be restrictive on the business of any member of the wider George Wimpey Group or the wider Taylor Woodrow Group other than to a nature and extent which is normal in the context of the business concerned, to an extent which is or would be reasonably likely to be material in the context of the wider George Wimpey Group taken as a whole or wider Taylor Woodrow Group taken as a whole; (xii) waived or compromised any claim otherwise than in the ordinary course of business and in any case which is or would be reasonably likely to be material in the context of the wider Taylor Woodrow Group taken as a whole or the wider George Wimpey Group taken as a whole; or (xiii) entered into any contract, commitment, arrangement or agreement otherwise than in the ordinary course of business or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this condition; g) since 31 December 2006 and save as disclosed in the accounts for the year then ended in each case and save as publicly announced in accordance with the Listing Rules by Taylor Woodrow or George Wimpey prior to 26 March 2007 or as fairly disclosed by or on behalf of Taylor Woodrow or George Wimpey to the other prior to 26 March 2007: (i) no material adverse change or deterioration having occurred in the business, assets, financial or trading position or profits of the wider Taylor Woodrow Group or the wider George Wimpey Group taken as a whole; (ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the wider Taylor Woodrow Group or the wider George Wimpey Group is or may become a party (whether as a plaintiff, defendant or otherwise) and no investigation by any Third Party against or in respect of any member of the wider Taylor Woodrow Group or the wider George Wimpey Group having been instituted, announced or threatened by or against or remaining outstanding in respect of any member of the wider Taylor Woodrow or the wider George Wimpey Group which in any such case would have or would reasonably be expected to have a material adverse effect on the wider Taylor Woodrow Group or the wider George Wimpey Group as a whole; (iii) no contingent or other liability having arisen which would have or would reasonably be expected to have a material adverse effect on the wider Taylor Woodrow Group or the wider George Wimpey Group as a whole; (iv) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the wider Taylor Woodrow Group or the wider George Wimpey Group which is necessary for the proper carrying on of its business and the absence of which in any case would have or would reasonably be expected to have a material adverse effect on the wider Taylor Woodrow Group or the wider George Wimpey Group as a whole; h) save as (i) publicly announced in accordance with the Listing Rules by Taylor Woodrow or George Wimpey prior to 26 March 2007, (ii) disclosed in the annual report and accounts of George Wimpey for the financial year ended 31 December 2006, or (iii) disclosed in the annual report and accounts of Taylor Woodrow for the financial year ended 31 December 2006, Taylor Woodrow not having discovered in relation to the wider George Wimpey Group and George Wimpey not having discovered in relation to the wider Taylor Woodrow Group: i) that any financial, business or other information concerning the wider Taylor Woodrow Group or the wider George Wimpey Group as contained in the information publicly disclosed or disclosed to Taylor Woodrow at any time by or on behalf of any member of the wider George Wimpey Group, or to George Wimpey at any time by or on behalf of any member of the wider Taylor Woodrow Group, is materially misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make that information not materially misleading; or ii) that any member of the wider Taylor Woodrow Group or the wider George Wimpey Group is subject to any liability (contingent or otherwise which is material in the context of the Taylor Woodrow Group or the George Wimpey Group as a whole) which is not disclosed in the annual report and accounts of George Wimpey for the year ended 31 December 2006 or of Taylor Woodrow for the year ended 31 December 2006; and i) Taylor Woodrow not having discovered in relation to the wider George Wimpey Group and George Wimpey not having discovered in relation to the wider Taylor Woodrow Group that: i) any past or present member of the wider Taylor Woodrow Group or the wider George Wimpey Group has failed to comply with any and/or all applicable legislation or regulation, of any jurisdiction with regard to the disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health or animal health or otherwise relating to environmental matters, or that there has otherwise been any such disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have taken place) any of which disposal, spillage, release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent) on the part of any member of the wider Taylor Woodrow Group or the wider George Wimpey Group and which is material in the context of the wider Taylor Woodrow Group or the wider George Wimpey Group as a whole; or ii) there is, or is likely to be, for that or any other reason whatsoever, any liability (actual or contingent) of any past or present member of the wider Taylor Woodrow Group or the wider George Wimpey Group to make good, repair, reinstate or clean up any property or any controlled waters now or previously owned, occupied, operated or made use of or controlled by any such past or present member of the wider Taylor Woodrow Group or the wider George Wimpey Group, under any environmental legislation, regulation, notice, circular or order of any government, governmental, quasi-governmental, state or local government, supranational, statutory or other regulatory body, agency, court, association or any other person or body in any jurisdiction and which is material in the context of the wider Taylor Woodrow Group or the wider George Wimpey Group as a whole. 4 For the purposes of these conditions the 'wider George Wimpey Group' means George Wimpey and its subsidiary undertakings, associated undertakings and any other undertaking in which George Wimpey and/or such undertakings (aggregating their interests) have a significant interest and the 'wider Taylor Woodrow Group' means Taylor Woodrow and its subsidiary undertakings, associated undertakings and any other undertaking in which Taylor Woodrow and/or such undertakings (aggregating their interests) have a significant interest and for these purposes 'subsidiary undertaking', 'associated undertaking' and ' undertaking' have the meanings given by the Companies Act, other than paragraph 20(1)(b) of Schedule 4A to that Act which shall be excluded for this purpose, and 'significant interest' means a direct or indirect interest in ten per cent. or more of the equity share capital (as defined in that Act). 5 Subject to the requirements of the Panel in accordance with the City Code: a) Taylor Woodrow reserves the right to waive, in whole or in part, all or any of the above conditions, except conditions 1, 2 and 3(b), so far as they relate to George Wimpey, the wider George Wimpey Group, or any part thereof; and b) George Wimpey reserves the right to waive, in whole or in part, all or any of the above conditions, except conditions 1, 2 and 3(b), so far as they relate to Taylor Woodrow, the wider Taylor Woodrow Group, or any part thereof. PART B Certain further terms of the Merger 1 If Taylor Woodrow is required by the Panel to make an offer for George Wimpey Shares under the provisions of Rule 9 of the City Code, Taylor Woodrow may make such alterations to any of the above conditions as are necessary to comply with the provisions of that Rule. 2 Taylor Woodrow and George Wimpey may decide to implement the Merger by way of an Offer. In such event, the Merger will be implemented on the same terms (subject to appropriate amendments including (without limitation) an acceptance condition set at 90 per cent. of the shares to which the Merger relates or such other percentage as may be required by the Panel and subject to availability of an exemption from the registration requirements of the US Securities Act and such amendments that Taylor Woodrow deems necessary or appropriate in respect of US Securities laws), so far as applicable, as those which would apply to the implementation of the Merger by means of the Scheme. 3 The Merger will not proceed if, after the date of this announcement and before the George Wimpey Extraordinary General Meeting, the Merger is referred to the Competition Commission. 4 The Merger will be governed by English law and be subject to the jurisdiction of the English courts, and to the Conditions set out in this announcement and in the formal Scheme Document. 5 This announcement is not an offer of securities for sale in the United States and the New Taylor Woodrow Shares, which will be issued in connection with the Merger, have not been, and will not be, registered under the US Securities Act or under the securities law of any state, district or other jurisdiction of the United States, Australia, Canada or Japan and no regulatory clearance in respect of the New Taylor Woodrow Shares has been, or will be, applied for in any jurisdiction other than the UK. The New Taylor Woodrow Shares may not be offered or sold in the United States absent registration under the US Securities Act or an exemption from registration. It is expected that the New Taylor Woodrow shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Under applicable US securities laws, persons (whether or not US persons) who are or will be ' affiliates' (for the purposes of the US Securities Act) of Taylor Woodrow or George Wimpey prior to, or of Taylor Woodrow after, the Effective Date will be subject to certain transfer restrictions relating to the New Taylor Woodrow Shares received in connection with the Merger. APPENDIX 2 BASES AND SOURCES AND ADDITIONAL FINANCIAL AND OPERATIONAL INFORMATION 1 Unless otherwise stated: â€¢ financial information relating to Taylor Woodrow has been extracted or provided (without material adjustment) from the audited annual report and accounts for Taylor Woodrow for the year ended 31 December 2006 reported under IFRS; and â€¢ financial information relating to George Wimpey has been extracted or provided (without material adjustment) from the audited annual report and accounts for George Wimpey for the year ended 31 December 2006 reported under IFRS. 2 For the purposes of this announcement, pro forma numbers represent the sum of Taylor Woodrow's and George Wimpey's reported figures for the year ended 31 December 2006 3 Landbank, strategic landbank plot and completion shall have the meanings ascribed to them in each individual company's 2006 audited annual report and accounts 4 As at the close of business on 23 March 2007, Taylor Woodrow had in issue 581,917,049 ordinary shares of 25 pence each; and George Wimpey had in issue 400,963,763 ordinary shares of 25 pence each. The International Securities Identification Number for Taylor Woodrow Shares is GB0008782301 and for George Wimpey Shares is GB0009713446. 5 Pro forma annual revenues of Â£6,719.5 million for the Combined Group are calculated based upon the following: â€¢ by reference to Taylor Woodrow's reported annual revenues of Â£3,572.1 million (excluding joint ventures) in 2006 â€¢ by reference to George Wimpey's reported annual revenues of Â£3,147.4 million (excluding joint ventures) in 2006 6 Pro forma annual UK housing completions of 21,910 for the Combined Group are calculated based upon the following: â€¢ by reference to Taylor Woodrow's reported annual UK housing completions of 8,294 in 2006 â€¢ by reference to George Wimpey's reported annual UK housing completions of 13,616 in 2006 7 Pro forma annual North American housing completions of 8,839 for the Combined Group are calculated based upon the following: â€¢ by reference to Taylor Woodrow's reported annual North American housing completions of 4,492 in 2006 â€¢ by reference to George Wimpey's reported annual North American housing completions of 4,347 in 2006 8 The combined market capitalisation of Â£4,993 million is calculated: â€¢ by reference to Taylor Woodrow's market capitalisation of Â£2,447 million, based on a price of 420.5 pence per Taylor Woodrow Share (being the Closing Price on 23 March 2007, the last Business Day prior to this announcement) and 581,917,049 ordinary shares outstanding; and â€¢ by reference to George Wimpey's market capitalisation of Â£2,546 million, based on a price of 635.0 pence per George Wimpey Share (being the Closing Price on 23 March 2007, the last Business Day prior to this announcement) and 400,963,763 ordinary shares outstanding; and 9 Pro forma UK landbank of 92,826 plots for the Combined Group as at 31 December 2006 is calculated based upon the following: â€¢ by reference to Taylor Woodrow's reported UK landbank of 34,827 plots as at 31 December 2006 â€¢ by reference to Taylor Woodrow's reported UK landbank of 57,999 plots as at 31 December 2006 10 Pro forma cost savings for the Combined Group are calculated based upon the following: â€¢ by reference to George Wimpey's statement in their 2006 audited annual report and accounts, referring to Â£25 million cost savings in the UK business and US$20 million in the US business for 2007 ADDITIONAL FINANCIAL INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2006 (Â£m) Taylor Woodrow George Wimpey Pro forma Profit and loss Revenue 3,572 3,147 6,719 Operating profit 470 423 893 Operating margin 13% 13% 13% PBT (pre-exceptional) 406 371 777 PAT (pre-exceptional) 291 256 547 Balance sheet Land 1,857 2,340 4,197 Inventories (excl. land) 1,089 800 1,889 Land payables 373 607 980 Net debt 391 387 778 Shareholders equity 2,106 1,707 3,813 Segmental analysis Revenue UK 1,759 2,391 4,150 North America 1,170 756 1,926 Spain & Gibraltar 92 0 92 Construction 551 0 551 Total 3,572 3,147 6,719 Operating profit UK 215 309 1 525 North America 220 114 1 334 Spain & Gibraltar 26 0 26 Construction 8 0 8 Total 470 423 893 Source: 2006 audited annual reports and accounts of Taylor Woodrow and George Wimpey Notes: 1. Operating profit pre-exceptionals, including share of joint ventures and corporate costs, pro rated on UK/North America split of operating profit pre-exceptionals Taylor Woodrow George Wimpey Build costs as a % of revenue 55.5 51.4 Land costs as a % of revenue 24.3 28.0 1 Overhead costs per completion Â£10.2k Â£8.3k 2 Source: Presentation of 2006 full year results of Taylor Woodrow, presentation of preliminary results for year ended 31 December 2006 of George Wimpey, Taylor Woodrow management for the build cost as a % of revenue and for the overhead costs per completion Notes: 1 Calculated as the reported cost per plot for UK housing completions divided by the reported total ASP for UK housing for the year ended 31 December 2006 2 Calculated as the reported overhead cost for UK housing divided by the reported number of UK completions for the year ended 31 December 2006 ADDITIONAL OPERATIONAL INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2006 Taylor Woodrow George Wimpey Pro forma North American landbank (plots) Owned 19,905 11,961 31,866 Controlled 11,448 6,7761 18,224 Total 31,353 18,737 50,090 Years 4.4 4.3 4.4 Sources: Presentation of 2006 full year results of Taylor Woodrow, presentation of preliminary results for year ended 31 December 2006 of George Wimpey, George Wimpey management for the breakdown between owned and controlled land Note: 1. Includes optioned land Taylor Woodrow George Wimpey Pro forma UK landbank (plots) Short term land 6,876 34,900 41,776 Medium term land 13,345 13,433 26,778 Long term land 14,606 9,666 24,272 Landbank length (years) 4.2 4.3 1 4.2 Average plot cost (Â£'000s) 38.0 47.3 43.4 Strategic land (acres) 18,000 15,846 33,846 Sources: 2006 audited annual reports and accounts of Taylor Woodrow and George Wimpey, presentation of 2006 full year results of Taylor Woodrow, presentation of preliminary results for year ended 31 December 2006 of George Wimpey, Taylor Woodrow management for the breakdown between short term, medium term, and long term land Note: 1. Calculated as the reported number of plots of the UK landbank divided by the reported number of UK completions for the year ended 31 December 2006 North American completions Taylor Woodrow Morrison Homes Pro forma housing Taylor Woodrow Homes completions Lots Florida 835 1,632 2,467 499 Arizona 1,245 569 1,814 1,171 Texas 280 1,266 1,546 306 California 540 587 1,127 156 Canada 1,592 0 1,592 508 Other 0 293 293 0 Total 4,492 4,347 8,839 2,640 Sources: Presentation of 2006 full year results of Taylor Woodrow, George Wimpey management for the Morrison Homes data APPENDIX 3 DEFINITIONS In this announcement, the following definitions apply unless the context requires otherwise: 'Admission' the admission of the New Taylor Woodrow Shares to the Official List, in accordance with the Listing Rules, and the admission of the New Taylor Woodrow Shares to trading on the London Stock Exchange's main market for listed securities in accordance with the Admission and Disclosure Standards 'Australia' the Commonwealth of Australia and its dependant territories 'Business Day' a day (other than a Saturday or Sunday or public holiday) on which banks are open for business in London 'Canada' Canada, its provinces and territories and all areas subject to its jurisdiction or any political sub-division thereof 'Capital Reduction' the proposed reduction of George Wimpey's share capital in connection with the Merger under section 135 of the Companies Act 'City Code' the City Code on Takeovers and Mergers 'Closing Price' the closing middle market price of a relevant share as derived from SEDOL on any particular day 'Combined Group' with effect from the Effective Date, the Taylor Woodrow Group (including the George Wimpey Group) 'Companies Act' or the 'Act' the Companies Act 1985 (as amended) 'Conditions' the conditions to the Merger set out in Appendix 1 to this announcement 'Court' the High Court of Justice in England and Wales 'Court Hearings' the two hearings by the Court of the petition to sanction the Scheme and to confirm the cancellation and extinguishment of the Scheme Shares provided by the Scheme under section 137 of the Companies Act 'Court Orders' the First Court Order and the Second Court Order 'Effective' (i) if the Merger is implemented by way of the Scheme, the Scheme having become effective pursuant to its terms; or (ii) if the Merger is implemented by way of an Offer, such Offer having been declared or become unconditional in all respects in accordance with the requirements of the City Code 'Effective Date' the date on which the Merger becomes Effective 'Exchange Ratio' the ratio pursuant to which the exact number of New Taylor Woodrow Shares to be issued in respect of each George Wimpey Share is determined so as to provide George Wimpey Shareholders, in aggregate and on a fully diluted basis, with 49 per cent. of the issued share capital of Taylor Woodrow, such ratio to be calculated by reference to the issued share capital of Taylor Woodrow immediately prior to the posting of the Scheme Document, or the Offer Document, if the Merger is implemented by way of the Offer 'First Court Order' the order of the Court sanctioning the Scheme under section 425 of the Companies Act 'George Wimpey' George Wimpey Plc 'George Wimpey Extraordinary General Meeting the extraordinary general meeting of George Wimpey ' Shareholders to be convened for the purposes of considering and, if thought fit, approving certain resolutions required to implement the Scheme 'George Wimpey Group' George Wimpey, its subsidiaries and subsidiary undertakings 'George Wimpey Shareholders' the holders of George Wimpey Shares 'George Wimpey Shares' the ordinary shares of 25 pence each in the capital of George Wimpey 'George Wimpey Share Schemes' the Employee Share Schemes operated by George Wimpey, including the Long Term Share Incentive Plan, the George Wimpey 2002 Savings Related Share Option Scheme, the George Wimpey 2002 Executive Share Option Plan and the George Wimpey 2007 Executive Incentive Scheme 'Hoare Govett' Hoare Govett Limited 'Independent Competing Transaction' (a) a proposed offer, merger, acquisition, scheme of arrangement, recapitalisation or other business combination involving the possible change of control of George Wimpey or Taylor Woodrow which, if accepted in full would result in the offeror holding shares carrying over 50 per cent. of the voting rights of George Wimpey or Taylor Woodrow, as the case may be, and which is made by or with a party which is not acting in concert with George Wimpey or Taylor Woodrow; (b) an offer, proposal or approach from any party to acquire all or a substantial part of its share capital or a substantial part of value of its assets or of any material member of its Group; or (c) an offer, proposal or approach from any party with a view to undertaking a transaction which would be an alternative to the Merger Japan, its cities, prefectures, territories and possessions 'Japan' 'JPMorgan Cazenove' JPMorgan Cazenove Limited 'Listing Rules' the rules and regulations of the UKLA, as amended from time to time and contained in the UKLA's publication of the same name 'London Stock Exchange' London Stock Exchange plc 'Long Stop Date' the date falling 120 days after the date on which the Scheme Document is posted (or such later time or date as Taylor Woodrow and George Wimpey may agree, with the approval of the Court and/or the Panel if required) 'Merger' the merger of George Wimpey and Taylor Woodrow to be implemented by way of scheme of arrangement pursuant to section 425 of the Companies Act or, if so agreed between Taylor Woodrow and George Wimpey, by an Offer, and where the context so permits references to an offer shall mean whether made by way of scheme of arrangement or an Offer 'Morgan Stanley' Morgan Stanley & Co. Limited 'New Taylor Woodrow Shares' the Taylor Woodrow Shares proposed to be issued, credited as fully paid up pursuant to the Merger 'Offer' a takeover offer as that term is defined in paragraph 1 (1) of Schedule 2 of the Takeovers Directive (Interim Implementation) Regulations 2006 or section 974 of the Companies Act 2006 when it comes into force to replace paragraph 1(1) of Schedule 2 of the Takeovers Directive (Interim Implementation) Regulations 2006 'Offer Document' should Taylor Woodrow and George Wimpey decide to implement the Merger by way an Offer, the document which would be despatched by Taylor Woodrow to the George Wimpey Shareholders with respect to such Offer 'Official List' the official list of the UKLA 'Panel' the Panel on Takeovers and Mergers 'pence' and 'Â£' the lawful currency of the United Kingdom 'Prospectus' the prospectus to be published by Taylor Woodrow in respect of the Admission 'Registrar of Companies' the Registrar of Companies in England and Wales, within the meaning of the Companies Act 'Scheme' the proposed scheme of arrangement of George Wimpey under section 425 of the Companies Act to implement the Merger 'Scheme Document' the document to be dispatched to George Wimpey Shareholders in relation to the Scheme comprising the particulars required by section 426 of the Companies Act 'Scheme Meeting' the meeting of the Scheme Shareholders to be convened by an order of the Court under section 425 of the Companies Act to consider and, if thought fit, approve the Scheme (with or without amendment) and any adjournment thereof 'Scheme Shareholders' the holders of Scheme Shares 'Scheme Shares' (a) the existing unconditionally issued George Wimpey Shares at the date of the Scheme Document; (b) any further George Wimpey Shares which are unconditionally issued after the date of the Scheme Document but before the Scheme Voting Record Time; and (c) any George Wimpey Shares issued at or after the Scheme Voting Record Time and before 6.00 p.m. on the day before the date on which the Second Court Order is made confirming the Capital Reduction in respect of which the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the Scheme; in each case other than any George Wimpey Shares beneficially owned by Taylor Woodrow 'Scheme Voting Record Time' 6.00 p.m. on the day which is two days before the Scheme Meeting or, if the Scheme Meeting is adjourned, 6.00 p.m. on the second day before the date of such adjourned meeting 'Second Court Order' the order of the Court confirming the Capital Reduction 'SEDOL' the London Stock Exchange Daily Official List 'subsidiary', 'subsidiary undertaking', ' have the meanings ascribed to them under the Companies associated undertaking' and 'undertaking' Act 'Taylor Wimpey' Taylor Woodrow following its change of name on the Effective Date to Taylor Wimpey plc 'Taylor Woodrow' Taylor Woodrow plc 'Taylor Woodrow Extraordinary General the extraordinary general meeting of Taylor Woodrow Meeting' Shareholders to consider and, if thought fit, to approve the Merger and to pass certain other resolutions in connection with the Merger 'Taylor Woodrow Group' Taylor Woodrow, its subsidiaries and subsidiary undertakings 'Taylor Woodrow Shareholders' the holders of Taylor Woodrow Shares 'Taylor Woodrow Shareholder Circular' the circular to be dispatched to Taylor Woodrow Shareholders outlining the Merger and containing the notice convening the Taylor Woodrow Extraordinary General Meeting 'Taylor Woodrow Shares' ordinary shares of 25 pence each in the capital of Taylor Woodrow 'Taylor Woodrow Share Schemes' the Employee Share Schemes operated by Taylor Woodrow including the Taylor Woodrow 2004 Deferred Bonus Plan, the Taylor Woodrow 2004 Performance Share Plan, the Taylor Woodrow 2004 Savings-Related Share Option Plan, the Taylor Woodrow 2004 Share Incentive Plan, the Taylor Woodrow Stock Purchase Plan and the Taylor Woodrow Canadian Employee Stock Purchase Plan 'UBS' or 'UBS Investment Bank' UBS Limited 'UK Listing Authority' or 'UKLA' means the Financial Services Authority in the UK acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 'US' or 'United States' the United States of America, its territories and possessions, any state in the United States of America and the District of Columbia 'US Securities Act' the United States Securities Act of 1933 (as amended) Unless otherwise stated, all times referred to in this announcement are references to London time. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof. APPENDIX 4 SCHEDULE OF IRREVOCABLE UNDERTAKINGS Taylor Woodrow Name of Taylor Woodrow Director Number of Taylor Percentage of Woodrow Shares Taylor Woodrow issued share capital Norman Askew 9,974 0.002% Peter Johnson 94,407 0.024% Mike Davies 5,000 0.001% Andrew Dougal 5,000 0.001% Katherine Ker 1,000 0.000% Vernon Sankey 10,778 0.003% Total 126,159 0.031% George Wimpey Name of George Wimpey Director Number of George Percentage of Wimpey Shares George Wimpey issued share capital John Robinson 29,770 0.007% Peter Redfern 41,344 0.010% Andrew Carr-Locke 200,000 0.050% David Williams 5,808 0.001% Christine Cross 5,847 0.001% Brenda Dean 6,000 0.001% Anthony Reading 10,139 0.003% Robert Sharpe 1,200 0.000% Total 300,108 0.075% -------------------------- This information is provided by RNS The company news service from the London Stock Exchange

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