Zillow has announced its intention to acquire Trulia for $3.5 billion in a stock-for-stock transaction – a deal that, if approved, will create one of the largest online real estate marketplaces in the world.
However, the merger will likely be highly scrutinized by regulatory bodies, including the Federal Trade Commission, to ensure it is in line with antitrust laws – thus, it may take more than a year to complete.
The boards of directors of both companies have approved the transaction, which is expected to close sometime in 2015.
Zillow plans to keep the Trulia brand intact, company officials say in a press release.
Pete Flint, CEO of Trulia, will continue to head the company and will report to Spencer Rascoff, CEO of Zillow. In addition, Flint will join the board of directors of the combined company.
A second member of Trulia's board of directors will join the board of the combined company at closing, when further operational and organizational details will be announced.
The deal is expected to yield significant synergies and operational efficiencies for both companies. Last month, Zillow reported that it had 83 million users while Trulia reported 54 million – a combined 61% of total Internet users for the real estate category, according to ComScore.
Yet only about half of Zillow's users also used Trulia – and vice versa – as the former is more focused on home sellers while the other is more focused on homebuyers.
Zillow says the combined company will be able to accelerate innovation, which, in turn, will produce more Web-based tools and services. In addition, the companies will be able to share real estate market data, housing trend analysis and forecasts to make more free data available to consumers and real estate professionals. Broader distribution and enhanced value for advertisers will also be benefits of the deal.
What's more, the companies expect to realize at least $100 million in cost efficiencies by combining their operations.
The deal between the two companies reportedly took less than six weeks to consummate.
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