Shares of Tri Pointe Homes (TPH) surged almost 5% in Monday morning trading after it announced that it will unite with Weyerhaeuser’s (WY) home building division.
The cash and shares deal is valued at $2.7 billion. Tri Pointe will obtain Weyerhaeuser’s Pardee Homes, Trendmaker Homes, Maracay Homes, Winchester Homes and Quadrant Homes brands, the Associated Press notes.
Under the deal, Weyerhaeuser Real Estate will become a subsidiary of Tri Pointe. Weyerhaeuser shareholders will own 80.5% of the combined company, whose board will expand from seven to nine members. Weyerhaeuser will choose four directors and Tri Pointe will select the remaining five.
Tri Pointe indicated that the deal would increase its presence in key markets including Houston, Washington D.C, Las Vegas and Southern California.
Shares of Weyerhaeuser rose modestly in Monday trading.