Hyde pulls out of sector's largest ever merger

A joint statement from L&Q and Hyde this morning said “practical issues” meant Hyde Group had backed out of a merger with L&Q and East Thames.

However, L&Q and East Thames confirmed they “remain committed” to merging.

The statement said L&Q and Hyde Group had “mutually agreed to end plans to merge”.

“It has become apparent that there are practical issues which cannot be easily overcome, and we concluded that in the current environment of unparalleled change and opportunity, resolving these issues would require time that we do not have,” the statement added.

The three London housing associations were planning to come together to form a giant 135,000-home social landlord capable of building 100,000 homes over 10 years.

They announced they had opened merger talks in April, with plans to form the fourth biggest housebuilder in the UK.

In a joint statement, L&Q and East Thames said they would continue to pursue the aim to build 100,000 new homes, however it did not specify the time period over which these would be built.

The statement did not expand on the specific reasons for why Hyde dropped out of the merger.

Just last week, ratings agency S&P said it considered the ‘mega-merger’ to be positive for Hyde’s creditworthiness.

When the housing associations’ merger plans were announced, then-housing minister Brandon Lewis welcomed the move, saying: “In my mind this is exactly what housing associations should be doing.”

The proposed merger would have involved the amalgamation of Hyde and L&Q, plus the joining of East Thames as a 100% owned subsidiary responsible for its care and support operation.

They had hoped to complete the merger by the end of this year, subject to consultation with tenants and lenders.