According to a statement from Rocket, the merger will establish a powerhouse in the mortgage sector, representing one in every six U.S. mortgages. Additionally, the deal will expand Rocket’s client base by nearly 7 million, enhancing its market presence while simultaneously reducing customer acquisition costs.
Per a statement from Mr. Cooper Chairman and CEO Jay Bray, the combination of the two companies aims to create the “strongest mortgage company in the industry,” offering a seamless homeownership experience supported by advanced technology and customer-focused service. Bray is set to take on the role of president and CEO of Rocket Mortgage following the deal’s completion.
The acquisition takes place against the backdrop of a struggling U.S. housing market, which has been grappling with high mortgage rates and escalating home prices. These factors have made homeownership increasingly unattainable for many Americans. Companies like Rocket have responded by pursuing acquisitions to build a more comprehensive service model for prospective buyers and homeowners.
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. Once the transaction is finalized, Rocket shareholders will own approximately 75% of the combined entity, while Mr. Cooper stockholders will hold the remaining 25%. The newly formed company’s board of directors will include 11 members, nine of whom will be from Rocket and two from Mr. Cooper. Mr. Cooper is headquartered in Coppell, Texas, while Rocket is based in Detroit.
Read more: Rocket Cos. to Acquire Redfin in $1.75 Billion All-Stock Deal
Rocket’s acquisition streak underscores its aggressive expansion strategy. Earlier this month, the company confirmed its purchase of Redfin, a real estate listing firm with over 1 million for-sale and rental listings on its platform. The deal is expected to bolster Rocket’s real estate services and provide a more integrated approach for homebuyers navigating the current housing market.
Meanwhile, the broader real estate sector has seen some signs of improvement. The National Association of Realtors recently reported that existing home sales rose by 4.2% in February from the previous month, reaching a seasonally adjusted annual rate of 4.26 million units. This uptick was driven in part by moderating mortgage rates and increased housing inventory.
The U.S. housing market has been in a downturn since 2022, when mortgage rates began climbing from their pandemic-era lows.
Source: AP News
