Mortgage giant Rocket Companies (RKT) announced Monday it agreed to purchase digital real estate brokerage Redfin (RDFN) in an all-stock deal valued at $1.75 billion.
Redfin stock rose as much as 76% on the news. Rocket stock fell as much as 10%. In 2024, Rocket’s revenues were $5.1 billion; Redfin reported revenue of $1.04 billion in 2024.
“For far too long, the homeownership process has been outdated and disconnected. Home search, brokerage, mortgage, title, closing, and servicing all exist in separate ecosystems, forcing consumers to piece together a complex and frustrating journey,” Rocket Companies CEO Varun Krishna told analysts and investors on the conference call Monday morning.
“This disjointed system creates confusion, adds friction, and drives up transaction fees totaling roughly 10% of a home’s cost,” Krishna added.
The deal comes at a time when the housing market has struggled amid high mortgage rates and tight home supply. Redfin’s stock peaked at $96.81 in February 2021, when housing was thriving during the pandemic. Record-low interest rates played a crucial role in driving refinancing and fueling the market. RKT went public in August 2020, positioning itself to capitalize on these favorable market conditions.
Read more: Rocket’s deal to buy Redfin would consolidate home listings and mortgage lending in one shop
RDFN RKT
According to a statement announcing the deal, Redfin shareholders will receive just under 0.8 shares of Rocket stock for each share of Redfin. Current Rocket shareholders will own about 95% of the combined company on a fully diluted basis, while Redfin shareholders will own approximately 5%.
Rocket shareholders will receive a special cash dividend of $0.80 per share. The deal values Redfin at $12.50 per share.
The companies said the combined company should be able to cut about $140 million in costs by 2027 — and realize an additional $60 million in savings from pairing Redfin agents with Rocket’s financing infrastructure.
“Rocket and Redfin’s approaches to lending and brokerage service have always been two halves of one vision to make the whole home-buying process magical,” Redfin CEO Glenn Kelman said in the release.
The deal was approved by the boards of both companies and is expected to close in the second or third quarter of 2025.
Upon the agreement, Kelman will continue to run Redfin’s business, reporting to Rocket Companies CEO Krishna.
Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.
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