By MICHELLE CHAPMAN, Associated Press
The mortgage company Rocket is buying competitor Mr. Cooper in an all-stock deal valued at $9.4 billion, just weeks after acquiring real estate listing company Redfin.
Rocket Cos. said Monday that bringing Mr. Cooper Group Inc. into the fold will create a business representing one in every six mortgages in the United States and give it almost 7 million additional clients. The deal will boost loan volumes, the company said, while lowering client acquisition costs.
“By combining Mr. Cooper and Rocket, we will form the strongest mortgage company in the industry, offering an end-to-end homeownership experience backed by leading technology and grounded in customer care,” Mr. Cooper Chairman and CEO Jay Bray, who will become president and CEO of Rocket Mortgage, said in a statement.
The U.S. housing market has been slumping for years with homebuyers, and sellers, buffeted by soaring mortgages rates and sky high prices that have put homes out of reach for many Americans.
Companies like Rocket, which is on an acquisition streak, are attempting to create more of a one-stop shopping experience for frazzled would-be homebuyers.
Bray will report to Rocket Cos. CEO Varun Krishna.
Mr. Cooper shareholders will receive a fixed exchange ratio of 11 Rocket shares for each share of Mr. Cooper common stock. Mr. Cooper is based in Coppell, Texas.
Rocket shareholders will own approximately 75% of the combined company, while Mr. Cooper stockholders will own about 25%. The combined company’s board will have 11 members, with nine being from Rocket and two from Mr. Cooper.
Earlier this month Rocket, based in Detroit, announced that it was buying Redfin in an all-stock deal worth $1.75 billion.
Redfin, which was founded in 2004, has more than 1 million for sale and rental listings on its online platform.
The National Association of Realtors announced this month that existing home sales rose 4.2% in February from January to a seasonally adjusted annual rate of 4.26 million units. That was in part thanks to easing mortgage rates and more properties on the market encouraging home shoppers.
The U.S. housing sales began to slump in 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied U.S. homes fell last year to their lowest level in nearly 30 years.
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