The deal will enable Persimmon to expand across the UK

The 560 pence-a-share cash offer has been recommended by Westbury's board of directors, although it must be approved by the shareholders of both companies.

Persimmon said there was a "compelling logic" to the deal, which would boost its land assets and increase its presence in certain areas of the UK.

Persimmon currently builds more than 12,000 houses a year.

Well matched

Cheltenham-based Westbury, which has 1,500 employees, described the offer as "fair and reasonable".

The deal is expected to mean the closure of Westbury's Cheltenham headquarters, at a cost of about 100 jobs.

The Westbury business is an excellent geographical and product fit for Persimmon John White, Persimmon chief executive Check Persimmon's shares Check Westbury's shares

It operates nine regional housebuilding divisions and is particularly strong in the south-west of England and Wales.

"The Westbury business is an excellent geographical and product fit for Persimmon," Persimmon's chief executive John White said.

"We are confident of capturing significant synergies and additional operational benefits to create value for Persimmon shareholders."

Persimmon enjoyed a 30% rise in profits to �470m last year.

However, housebuilders have seen their profits squeezed this year as growth in the housing market has slowed.