Rocket Companies has announced that it is acquiring its competitor, Mr. Cooper Group Inc., in a significant all-stock deal worth $9.4 billion. This action comes shortly after Rocket’s purchase of the real estate listing platform, Redfin.
By merging with Mr. Cooper, Rocket aims to establish itself as a major player in the mortgage industry, with plans to handle one in every six mortgages in the United States. The acquisition is expected to add nearly 7 million customers to Rocket’s portfolio while enhancing loan volumes and reducing costs associated with attracting new clients.
Jay Bray, the Chairman and CEO of Mr. Cooper, stated that this merger will create the strongest mortgage company in the sector, providing a comprehensive homeownership experience that integrates advanced technology with a focus on customer service. Following the merger, Bray will step into the role of president and CEO of Rocket Mortgage.
The U.S. housing market has been facing challenges for some time, with both buyers and sellers struggling due to high mortgage rates and inflated property prices, making homeownership less attainable for many Americans. In response, companies like Rocket are trying to simplify the home-buying process by offering a more integrated service for anxious potential homeowners.
In terms of the merger structure, Mr. Cooper shareholders will exchange their shares for Rocket shares at a fixed ratio of 11 Rocket shares for each Mr. Cooper share. Once the deal is finalized, Rocket shareholders will own approximately 75% of the new entity, while Mr. Cooper shareholders will hold around 25%. The board of the combined company will comprise 11 members, with the majority coming from Rocket.
Earlier this month, Rocket also made headlines when it announced its acquisition of Redfin in an all-stock transaction valued at $1.75 billion. Founded in 2004, Redfin offers an extensive online platform featuring over 1 million property listings for sale and rental.
Recent reports from the National Association of Realtors indicated a slight uptick in existing home sales in February compared to January, attributed to lower mortgage rates and an increase in available properties for buyers. However, the U.S. housing market has been on a downward trend since 2022, as rising mortgage rates contributed to the steepest decline in home sales in nearly three decades.
