Miami-based Lennar Corporation will merge with CalAtlantic Group, creating the largest homebuilder in the country in a $5.7 billion deal.
The deal will boost the combined company’s standing to a top 3 ranking in 24 of the top 30 markets in the country, Lennar CEO Stuart Miller said in a statement. Together, Lennar and CalAtlantic reported revenues of more than $17 billion last year and a market cap of about $18 billion.
Lennar expects to generate about $250 million a year in savings, including $75 million in fiscal year 2018. The combined company will control 240,000 homesites and 1,300 communities in 49 markets across 21 states.
The $9.3 billion deal includes about $3.6 billion of debt Lennar will assume, according to a press release.
Shareholders of both companies have to approve the merger, which is expected to close in the first quarter of 2018. CalAtlantic stockholders would own about 26 percent of the combined company, according to the release. Each CalAtlantic share will be valued at a 27 percent premium, or 0.885 of Lennar stock, and shareholders will have the option to cash out up to $1.2 billion.
The transaction is subject to approval by Lennar and CalAtlantic stockholders. CalAtlantic is based in Arlington, Virginia. Scott Stowell, CalAtlantic’s executive chairman, will join Lennar’s board of directors.
Lennar has dominated the Miami market, and recently picked up more than 180 acres in north Miami-Dade. – Katherine Kallergis