On Monday, Rocket Companies the Mortgage giant announced that it has agreed to acquire Redfin, digital real estate brokerage in an all-stock deal valued at $1.75 billion. With it’s deal with Redfin looks like Rocket Companies. is trying to penetrate deeper into the property market.
On the conference call with investors Rocket Companies CEO Varun Krishna said, “For far too long, the homeownership process has been outdated and disconnected.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,”
“This disjointed system creates confusion, adds friction, and drives up transaction fees totaling roughly 10% of a home’s cost,” Krishna added.
Rocket Companies deal with Redfin
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.
What will shareholder get in Rocket and Redfin merger
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.
How the merger will benefit both Redfin and Roket Companies
In 2024, Rocket’s revenues were $5.1 billion; Redfin reported revenue of $1.04 billion in 2024.
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.\
Redfin and Rocket’s stock update
Redfin stock rose as much as 76% on the news. While Rocket’s stock fell as much as 10%.
