Pulte Homes’ (PHM) agreed on Tuesday to snap up rival Centex Corp. (CTX) for about $1.3 billion in stock.
The new acquisition creates an industry giant with a market cap of $4.1 billion, knocking rivals D.R. Horton Inc. (DHI) and Lennar Corp. (LEN) off their perch. It also gives Pulte first pick of ailing competitors.
Both companies are essentially betting that by executing this merger they will be better able to survive the longest housing slump in a century.
“A lot of people have believed and have speculated that there was going to be consolidation in the space,” said Richard Dugas, Michigan-based Pulte’s president and chief executive. “It was just the right time.” [via Dow Jones]