Mega merger collapses due to “cultural differences”

The planned merger of two of the largest social landlords in the care and support sector has been called off after problems arose between the two housing associations.

Sanctuary Group and Housing & Care 21 were working on plans to join forces in a 120,000 home landlord with a new subsidiary called Sanctuary 21 being set up to specialise in housing for older people. The subsidiary would have managed 32,000 retirement and extra care properties and rival Anchor as the largest HA providing homes and care for older people.

But it has emerged difficulties arose after the boards and management teams were reviewing the findings of the due diligence process. These could not be resolved satisfactorily so the merger was called off.

No merger

Housing & Care 21 says that it will not be looking to find an alternative housing organisation to merge with, but will instead re-focus on maintaining the momentum in its own improvement and investment programmes.

A spokesman said:

“We remain committed to being the leading provider of housing and care for older people of modest means.”

This is the first of the current spate of so-called mega mergers to collapse in midstream, but similar deals have been called off before and this will serve as a wake-up call to other housing associations involved in merger talks.

Originally the Sanctuary Group and Housing & Care 21 organisations said they were looking to create “efficiency gains and capacity” which they would use to build at least 800 affordable rent homes a year for older people. This was double their combined development programmes.

Other deals

Significant progress has also been made in other planned mergers. Sovereign and Spectrum Housing Group are now aiming to complete their deal before the end of the year. The newly-formed landlord will own and operate 55,000 properties in the south west of England.

And the Circle Housing Group has settled a long-running industrial dispute with trade unions which was threatening to disrupt its plans to create a huge landlord with 127,000 homes in London and the south east, through merging with Affinity Sutton.