Rocket Mortgage is acquiring competitor Mr. Cooper in an all-stock deal valued at $9.4 billion, shortly after its acquisition of real estate listing company Redfin.
The merger will create a combined entity handling one in every six mortgages in the US, adding nearly 7 million new clients to Rocket’s portfolio. This strategic move is expected to increase loan volumes and lower customer acquisition costs, news agency AP reported.
Jay Bray, Chairman and CEO of Mr. Cooper, who will become President and CEO of Rocket Mortgage, stated, “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.”
The US housing market has been in a slump, with soaring mortgage rates and high prices putting homeownership out of reach for many. Companies like Rocket are responding by building a more comprehensive, one-stop experience for potential homebuyers.
Under the terms of the deal, Mr. Cooper shareholders will receive a fixed exchange ratio of 11 Rocket shares for each share of Mr. Cooper common stock. Upon completion, Rocket shareholders will own approximately 75% of the combined company, while Mr. Cooper stockholders will own 25%. The combined company’s board will consist of 11 members, with nine from Rocket and two from Mr. Cooper.
Earlier this month, Rocket also announced its acquisition of Redfin in an all-stock deal valued at $1.75 billion. Redfin, founded in 2004, offers over 1 million for-sale and rental listings on its platform.
The National Association of Realtors reported a 4.2% increase in existing home sales in February, partly driven by easing mortgage rates and more properties available on the market. However, home sales began to decline in 2022 when mortgage rates started rising from pandemic-era lows, and last year, sales of previously owned US homes fell to their lowest level in nearly 30 years
