Rocket Companies announced Monday that it will acquire mortgage lender Mr. Cooper Group Inc. in an all-stock deal valued at $9.4 billion.
The move comes just weeks after Rocket’s $1.75 billion acquisition of real estate platform Redfin, marking its second major expansion effort this month.
The acquisition will significantly expand Rocket’s mortgage business, creating a company that services one in every six mortgages in the US and adding nearly 7 million new clients to its portfolio. Rocket, based in Detroit, said the deal would increase loan volume while reducing client acquisition costs.
“With the combination of Rocket and Mr. Cooper, 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,” said Mr. Cooper Chairman and CEO Jay Bray, who will become president and CEO of Rocket Mortgage after the deal closes.
Bray will report to Rocket Cos. CEO Varun Krishna.
Under the agreement, Mr. Cooper shareholders will receive 11 Rocket shares for each share of Mr. Cooper common stock. This values Mr. Cooper at approximately $143.33 per share, a 37% premium based on Friday’s closing price. Once the deal is finalized, Rocket shareholders will own about 75% of the combined company, with Mr. Cooper stockholders holding the remaining 25%.
Rocket’s board will expand to 11 members, with nine representatives from Rocket and two from Mr. Cooper.
Rocket’s acquisition spree comes as the US housing market shows signs of recovery. The National Association of Realtors recently reported that existing home sales rose 4.2% in February, driven by easing mortgage rates and improved housing inventory.
The broader mortgage industry has struggled in recent years due to rising interest rates, which slowed home sales and made borrowing more expensive. US home sales in 2023 hit their lowest level in nearly 30 years, following a steep decline that began in 2022 when mortgage rates started climbing from pandemic-era lows.
However, a recent dip in long-term bond yields and improved home supply have renewed optimism in the market. Rocket sees this as an opportunity to strengthen its position, integrating mortgage lending with home-buying services to create a seamless experience for customers.
Rocket expects the acquisition of Mr. Cooper to generate an additional $100 million in pre-tax revenue while saving approximately $400 million through streamlined operations and technology investments. The deal is also expected to boost Rocket’s adjusted earnings per share immediately upon closing, which is projected to occur in the fourth quarter of 2025.
Following the announcement, shares of Mr. Cooper surged more than 18% in early trading, while Rocket’s stock declined by 7.5%.
The Associated Press, USA Today, and Reuters contributed to this report.
