Lennar to buy CalAtlantic in US$9.3bn merger deal to create top three homebuilder in the US
Lennar Corp (NYSE:LEN) has agreed to merge with rival CalAtlantic Group Inc (NYSE:CAA), in a stock-and-cash deal, turning the combined entity into one of the top three housebuilders by revenue in the United States.
Under the deal, each CalAtlantic share can be exchanged for 0.885 shares of Lennar, which represents a 27% premium on CalAtlantic’s shares, based on Friday’s closing price.
READ: Lennar shares building higher as new home demand boosts third quarter
Lennar is buying CalAtlantic for $5.7bn but the total transaction value has been tagged at US$9.3bn, after including the US$3.6bn of net debt assumed.
Lennar chief executive Stuart Miller said the merger will increase Lennar’s presence in markets it already operates in and allow it to be one of the top three home builders in 24 of the top 30 markets in the country.
The deal, which was announced jointly by the companies on Monday will see the combined entity holding 240,000 building plots across 21 states.
READ: US housebuilder Lennar expects delays to deliveries after hurricanes Irma and Harvey
It will have a market value of about US$18bn and a combined revenue of US$17bn.
CalAtlantic shares surged 24.18% to US$50.23 on the news while Lennar slipped 2.28% at US$56.71.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/186432/lennar-to-buy-calatlantic-in-us93bn-merger-deal-to-create-top-three-homebuilder-in-the-us-186432.html
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