“Accordingly, our overall company size and local critical mass will yield significant benefits through efficiencies in purchasing, access to land, labor and overhead allocation to a greater number of deliveries,” he said.

On a pro forma basis, CalAtlantic stockholders are expected to own approximately 26% of the combined company.

The transaction, which is expected to close in the first calendar quarter of 2018, is subject to approval by Lennar and CalAtlantic stockholders.

The merger comes as new home sales are showing strong momentum. Last week the Commerce Department reported that new home sales in September rose by 18.9% to a seasonally adjusted annual rate of 667,000 units — the highest level in ten years. August's numbers were also upwardly revised to 561,000 units.

ARLINGTON, VA–Lennar Corp. is acquiring the locally-based CalAtlantic Group in a deal valued at $9.3 billion, including $3.6 billion of assumed debt.

According to Lennar, the combined company will create the largest homebuilder in the US with the last twelve months of revenues more than $17 billion and an equity market capitalization of $18 billion. In addition, the combined company will control 240,000 home sites and will have 1,300 active communities in 49 markets across 21 states.

Under the deal, each share of CalAtlantic stock will be exchanged for 0.885 shares of Lennar Class A common stock. Based on the closing price of Lennar's stock on the NYSE on October 27, the implied value of the stock consideration is $51.34 per share, representing a 27% premium to CalAtlantic's closing price that same day.

With both companies homebuilders, the deal is expected to generate synergies of $250 million; $75 million of which is expected to be achieved in fiscal year 2018. Once combined, the company will use the cash flow generated to pay down debt and repurchase shares, according to Lennar CEO Stuart Miller. The combined company will also, he said in a prepared statement, “have a top 3 ranking in 24 of the top 30 markets in the country.”

“Accordingly, our overall company size and local critical mass will yield significant benefits through efficiencies in purchasing, access to land, labor and overhead allocation to a greater number of deliveries,” he said.

On a pro forma basis, CalAtlantic stockholders are expected to own approximately 26% of the combined company.

The transaction, which is expected to close in the first calendar quarter of 2018, is subject to approval by Lennar and CalAtlantic stockholders.

The merger comes as new home sales are showing strong momentum. Last week the Commerce Department reported that new home sales in September rose by 18.9% to a seasonally adjusted annual rate of 667,000 units — the highest level in ten years. August's numbers were also upwardly revised to 561,000 units.