The deal will give Galliford Try shareholders a 29.3% stake in the enlarged Bovis Homes worth £675m.

It also includes a £300m cash payment to Galliford Try and the transfer of Galliford Try’s 10-year private debt placement of £100m.

The deal, which catapults Bovis Homes up the ranking to become a top five house builder, will go before shareholders on 2 December with completion expected on 3 January.

Bovis also revealed it aimed to raise £157m through a share placing to help finance the acquisition.

Galliford Try said the proceeds would help it to create a cash-backed independent contractor.

The remaining business would employ around 3,400 staff generating revenue of around £1.4bn and enjoy an average daily net cash balance of around £150m.

Greg Fitzgerald, CEO of Bovis Homes said: “This is an exciting and transformational opportunity to create a leading UK house builder with an enhanced customer proposition and the ability to increase delivery to more than 12,000 new homes per year.

“The combination with Galliford Try Partnerships gives Bovis Homes a market leading position in the high growth, more resilient partnerships market, with significant potential to increase revenue and profit while delivering more affordable homes at a time when they are needed more than ever.”

Fitzgerald, who was formerly at Galliford Try for 11 years as CEO then chairman added: “I am very focused on successfully integrating these businesses in early 2020 with strong management across all business areas, and on delivering the clear benefits from the combination including at least £35 million of synergies as quickly as possible.”

Peter Ventress, Chairman of Galliford Try, said: “This transaction is a positive development which is in the best interests of both our shareholders and wider stakeholder group.

“For Galliford Try, it establishes a focused and well-capitalised construction business led by a very experienced and dedicated management team.

“Supported by a robust order book and strong market positions in key sectors, Galliford Try will be well-positioned for the future.

“This transaction also creates one of the UK’s leading housebuilding and partnerships businesses with great opportunity ahead, from which Galliford Try shareholders will benefit through their continued shareholding.”