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Barratt Homes has made an audacious break with its traditions this week with the purchase of rival volume housebuilder Wilson Bowden for 拢2.2bn.

Mark Clare, the chief executive who was installed four months ago, has reversed Barratt鈥檚 well established policy of growing organically rather than by aquisition. The firm has not bought another business for the past quarter of a century.

And the reversal could hardly be more dramatic: the deal is the biggest merger in British housebuilding history, and will create a company with a direct workforce of 7,500.

Clare has also sought to distance Barratt from the cheap-and-cheerful image that it acquired during its eighties heyday. Clare has emphasised that he wants to retain the upmarket David Wilson Homes brand, which will remain a division of Barratt.

Ian Robertson, Wilson Bowden鈥檚 chief executive, said: 鈥淒avid Wilson Homes gives them something that they don鈥檛 have at the moment. They feel under-represented at the top end of the market.鈥�

He added that Barratt would retain Wilson Bowden Developments, the Leicestershire company鈥檚 commercial arm, as a separate division.

A Barratt spokesman said: 鈥淥ne of the strategic wins is to get into commercial development. At the moment, Barratt has to farm out commercial development on mixed-use schemes.鈥�

Barratt has told the City that it will deliver 拢45m worth of efficiency savings in the second full year after merger.

Barratt has not bought another business for the past quarter of a century

The spokesman said no decision had yet been taken about the level of redundancies, or whether Barratt would its move its headquarters from its historic base in Newcastle upon Tyne.

Robertson said that although redundancies could not be ruled out, there would not be wholesale sackings at Wilson Bowden鈥檚 head office in Ibstock, Leicestershire, which will remain the headquarters of the David Wilson division.

He said: 鈥淚f you put the two together, you have a better balance. We weren鈥檛 in north-east or south-east England. Both parties have said upfront that that it鈥檚 going to be greater than the sum of the parts.鈥�

The merger will increase Barratt鈥檚 valuation to 拢4.3bn, its annual housing output from 14,000 homes a year to 19,700 and number of plots from 70,500 to 103,555.

It will also increase Barratt鈥檚 landbank from 2,800 acres to 12,100 and raise the average selling price of Barratt homes by nearly 拢10,000 to 拢175,400.

The Wilson Bowden tie-up will change Barratt鈥檚 geographical profile. At present, 20% of its homes are developed in the Midlands. This will rise to 28%.

David Wilson, Wilson Bowden鈥檚 co-founder and chairman, will net 拢730m from the sale, which values his business at 拢2.2bn. He will also own 6% of Barratt.

The agreed sale puts a 23% premium on Wilson Bowden鈥檚 closing price on 24 November, the day before the company announced it was for sale.