Rocket Companies, which includes Rocket Mortgage, has announced its intention to acquire residential real estate platform Redfin in an all-stock transaction.
The merger, if approved, would create a one-stop shop where home buyers could search for homes, get approved for mortgages and close on properties with greater speed and efficiency. In addition, it will enable both firms to combine their data and technology to deliver a more personalized home buying experience.
“Rocket and Redfin have a unified vision of a better way to buy and sell homes,” says Varun Krishna, CEO of Rocket Companies, in a release. “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.”
Redfin is one of the most-visited real estate brokerage websites, with nearly 50 million monthly visitors, while Rocket Mortgage is one of the country’s largest mortgage lenders. Both have had a strong focus on technology during the past 10-plus years.
During the past 40 years, Rocket’s digital platform has grown to provide home financing in all 50 states across 3,000+ counties and parishes. By combining Redfin’s home search and real estate agent network with Rocket’s mortgage origination and servicing capabilities, the company envisions a more seamless experience from search to close, to servicing and future transactions, Rocket says in its release.
“Rocket and Redfin’s approaches to lending and brokerage service have always been two halves of one vision to make the whole home-buying process magical,” says Glenn Kelman, CEO of Redfin. “We want a customer to be able to check her phone to find out what she can afford, see which homes are just right for her, schedule a tour with a local, expert Redfin agent, and get pre-qualified for a loan, all in a matter of minutes. Varun and I see how much better real estate could be when AI guides customers not just through that first step in their search, but all the way home, through the sale, the loan and then a lifetime of accumulating equity and wealth.”
The merger will bring significant strategic and financial benefits to both companies. For one, Rocket Mortgage will benefit from Redfin’s nearly 50 million monthly visitors, 1 million active purchase and rental listings and staff of 2,200+ real estate agents across 42 states, which, in turn, will increase its purchase volume.
In addition, the two firms will be able to combine their expertise in AI-driven technology powering both the home search and mortgage processes. With more than 14 petabytes of combined data, Rocket gains unparalleled consumer insights, including information about homebuyers, seller and agents across a data repository of 100 million properties. This data will strengthen Rocket’s AI models enabling easier and more personalized and automated consumer experiences.
The combined company is expected to achieve more than $200 million in run-rate synergies by 2027, including approximately $140 million in cost synergies from rationalization of duplicative operations and other costs.
In addition, Rocket expects more than $60 million in revenue synergies from pairing the company’s financing clients with Redfin real estate agents, and from driving clients working with Redfin agents to Rocket’s mortgage, title and servicing offerings.
The transaction is expected to be accretive to Rocket Companies’ adjusted earnings per share by the end of 2026.
The merger has been approved by the boards of directors of both Rocket Companies and Redfin and is expected to close in the second or third quarter of 2025, subject to approval by Redfin shareholders and the satisfaction of other closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Upon closing of the transaction, it is expected that Redfin CEO Glenn Kelman will continue to lead the Redfin business, reporting to Rocket Companies’ CEO Varun Krishna.
Photo: Edge2Edge Media