Rocket's deals for Redfin, Mr. Cooper bring new growth and challenges

Enjoy complimentary access to top ideas and insights — selected by our editors.

Market volatility under a second Trump administration was no match for Rocket Companies' appetite for mergers in the first quarter of the year, as the origination giant inked deals to acquire real estate brokerage Redfin and mega servicer Mr. Cooper. Now comes the difficult part of juggling the two deals at the same time.

Rocket announced its $1.75 billion all stock planned acquisition of Redfin on March 10 as part of a broader effort to grow its footprint in the purchase markets. If finalized, Rocket executives predict that joining its financing businesses with Redfin's real estate lines will yield more than $60 million in revenue. Predicted benefits also include roughly $140 million in cost savings from removing redundant operations.

"Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs and increases value to American homebuyers," Varun Krishna, Rocket Companies chief executive, said in a press release.

That deal has come under fire from certain  investors in recent weeks, who claim that Redfin failed to adequately disclose the relationship between potential acquirer Rocket and Goldman Sachs, which is advisor to Redin in the merger.

Read more: Rocket, Redfin and the race to dominate mortgage

Roughly three weeks after the Redfin acquisition was announced, Rocket made its play to purchase Mr. Cooper in an all-stock deal valued at more than $9 billion.

The deal activity has caused competitors like Newrez and Lower to pursue new ventures of their own.

Newrez, which reported a net income of $146.7 million in the first quarter due in part to growth in both servicing and originations, is toying with the idea of splitting from its parent company Rithm Capital by year's end.

Mortgage lender Lower is in the process of purchasing home search website Movato for an undisclosed amount as part of plans to create "an end-to-end homeownership platform." 

Below is a timeline outlining the evolution of the deal between Rocket and Mr. Cooper and how the markets are reacting.