Rocket Companies announced its acquisition of rival Mr. Cooper Group Inc. in an all-stock transaction valued at $9.4 billion. This move comes just weeks after Rocket’s purchase of real estate listing platform Redfin.
The merger will create a mortgage powerhouse responsible for one in every six mortgages in the U.S., adding nearly 7 million new clients. Rocket expects the deal to increase loan volumes while reducing customer acquisition costs.
“Combining Mr. Cooper and Rocket will make us the strongest mortgage company in the industry, offering a comprehensive homeownership experience supported by advanced technology and a commitment to customer care,” said Mr. Cooper Chairman and CEO Jay Bray, who will take over as president and CEO of Rocket Mortgage following the merger.
The U.S. housing market has been struggling for years, with high mortgage rates and steep home prices making homeownership increasingly out of reach for many Americans.
Companies like Rocket, which has been actively acquiring other businesses, are aiming to create a more convenient, one-stop shopping experience for overwhelmed potential homebuyers.
Jay Bray will report directly to Varun Krishna, CEO of Rocket Companies.
Under the terms of the deal, Mr. Cooper shareholders will receive 11 Rocket shares for each share of Mr. Cooper common stock they own. Mr. Cooper is headquartered in Coppell, Texas.
Following the merger, Rocket shareholders will hold about 75% of the combined company, while Mr. Cooper shareholders will own roughly 25%. The board of directors will consist of 11 members, with nine from Rocket and two from Mr. Cooper.
Earlier this month, Rocket, based in Detroit, announced its acquisition of Redfin in an all-stock deal valued at $1.75 billion. Redfin, founded in 2004, hosts over 1 million for-sale and rental listings on its platform.
According to the National Association of Realtors, existing home sales increased by 4.2% in February compared to January, reaching a seasonally adjusted annual rate of 4.26 million units. This growth was partly driven by falling mortgage rates and a higher inventory of homes, which encouraged more buyers to enter the market.
U.S. housing sales began to decline in 2022 as mortgage rates rose from pandemic-era lows. Sales of previously owned homes dropped to their lowest level in nearly three decades last year.
