Miller Group - one of the two firms behind the long awaited £500 million Arena Central development in Birmingham - today snapped up rival Fairclough Homes in a cash deal worth £264 million.
Miller - already the UK's largest privately- owned housebuilding, property development and construction business - acquired Fairclough, which has a number of projects in the West Midlands, from New York-listed Centex Corporation.
The US firm has owned the company since 1999.
The integration of the two businesses will move Miller's housebuilding operations into the UK's top ten largest housebuilders, with expected annual housing completions of over 4,000 dwellings.
It will also raise Edinburgh-based Miller's housing and group turnover to around £ 700 million and £1.1 billion respectively.
Miller Homes produced 2,505 completions in the year to December 31, generating turnover of £394 million, while Fairclough Homes produced 1,563 completions in the year to March 31, producing a turnover of £270 million.
The company has a number of developments in the Midlands, including projects at Northfield in Birmingham, Cannock, Burton-on-Trent, Newcastle under Lyme and Leicester. Miller Group said the deal was expected to be immediately earnings enhancing.
Miller will also benefit from the integration of the two businesses including the increased purchasing power of the combined organisation.
The acquisition increases Miller's landbank by 6,493 plots and provides a combined landbank of 16,943 plots which equates to four years' supply at current consumption levels.
"The acquisition has significant strategic benefits for Miller," said Tim Hough, Miller Homes chief executive.
"In one step, it creates a sustainable UK housing business able to complete in excess of 4,000 units per annum "It gives Miller critical mass in four key operating regions in England, outside of its well-established operations in Scotland - in the North-west, Yorkshire, West Midlands and the South.
"It provides a platform for the creation of Miller's ninth housing operation in St Albans, covering the Northern Home Counties - which Miller had not expected to achieve before next year - and the acquisition of a 6,493-unit landbank to add to Miller's existing landbank of 10,450 units."
Keith Miller, chief executive of Miller Group, added: "We have monitored Fairclough Homes for some time and are delighted to have acquired the business.
"It is a good strategic and geographic fit with our existing businesses, and has a strong management team and an excellent landbank. "
Miller is developing the huge Arena Central scheme with Bridgehouse Capital, the investment company set up by Midland millionaire Andy Ruhan.
The group recently said the final details of a revamped masterplan for the scheme were being thrashed out. Work could start on the project in six months to a year, once it is given final detailed planning approval by Birmingham City Council.