R
ocket Mortgage is teaming up with Redfin, the online real estate brokerage firm, in a $1.75 billion deal that will expand Rocket's presence in residential real estate. The all-stock acquisition, announced Monday morning, is pending approval by Redfin shareholders and expected to close in the second or third quarter. Redfin, founded in 2004, helps customers buy and sell homes with an enterprise value of $2.36 billion.

    The deal aims to boost Rocket Mortgage's business for home purchase mortgages. As part of the acquisition, Redfin CEO Glenn Kelman is expected to stay on and lead the Redfin business. "Rocket and Redfin have a unified vision of a better way to buy and sell homes," said Rocket Companies CEO Varun Krishna.

    Under the proposed deal, Rocket Companies shareholders will own about 95% of the combined company, while Redfin shareholders will own around 5%. The acquisition is expected to achieve over $200 million in cost savings by 2027. Additionally, Rocket announced a special $0.80 per share cash dividend and restructuring plans to simplify its capital structure and enhance equity liquidity.

    Rocket Companies returned to profitability in 2024 with $636 million in net income on $5.1 billion in revenue. The company's corporate parent, Rocket Companies, has been growing through acquisitions, including the purchase of Truebill in 2022, rebranded as Rocket Money.