The nationwide real estate recovery is compelling America’s biggest homebuilders to consolidate and scale their operations. On Monday, homebuilder Lennar LEN -0.54% unveiled a $5.7 billion all-stock merger deal for competitor CalAtlantic Group CAA -0.64%, a combination that will create America’s biggest homebuilder with combined revenues of $17 billion and a major presence in 21 states.
The merger deal is all about both builders’ increasing scale as nationwide new home starts generally trend towards post-crisis highs. By combining, Lennar and CalAtlantic Group will control nearly a quarter of a million homesites nationwide and a top thee presence in 24 of the top 30 housing market across the country. The combined company will have a footprint touching approximately 50% of the U.S. population and merged operations are expected to generate meaningful cost savings.