(Bloomberg) — The online mortgage provider Rocket Cos. is acquiring Mr. Cooper Group Inc. in an all-stock deal valued at $9.4 billion that will create a mortgage behemoth that handles one in every six mortgages in the US.
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The combined company will service a book of $2.1 trillion of loans and nearly 10 million clients, according to a statement Monday. Mr. Cooper shareholders will receive 11 Rocket shares for each of Mr. Cooper’s stock they own, representing a 35% premium, it said in the statement.
Rocket shares dropped 7.4% to $12.07 at 9:36 a.m. in New York. Shares of Mr. Cooper surged as much as 20%.
With the deal, Rocket is expanding its reach into the mortgage-servicing market and cementing its position as a one-stop shop for many parts of the homebuying process. Rocket has recently leaned into artificial intelligence to streamline that process, which has saved the company’s underwriters thousands of hours of manual work, it has said.
Earlier this month, the company struck a deal to acquire real estate brokerage Redfin Corp. in a purchase that valued the business at $1.75 billion.
“Servicing is a critical pillar of homeownership — alongside home search and mortgage origination,” Rocket Chief Executive Officer Varun Krishna said in Monday’s statement. “With the right data and AI infrastructure we will deliver the right products at the right time.”
It’s been a rough few years for the US housing market with high interest rates and prices sidelining many would-be buyers. Last year, sales of previously owned homes fell to the lowest level since 1995.
The boards of both companies have already approved the deal, which is scheduled for completion in the fourth quarter after receiving regulatory approvals, the firms said. Following the deal, Mr. Cooper CEO Jay Bray will become president and CEO of the Rocket Mortgage division, reporting to Krishna. Dan Gilbert will remain chairman of the broader Rocket Cos. company.
(Updates with shares in third paragraph, Rocket background in fourth paragraph.)
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