The Federal Housing Finance Agency AKA FHFA Approves Rocket Mortgage’s $9.4 billion acquisition of Mr. Cooper Group
FHFA approves the first hurdle for Rocket Mortgage’s $9.4 billion acquisition of Mr. Cooper Group. However, FHFA is imposing strict market concentration limits to safeguard the nation’s mortgage system. The agency authorized Fannie Mae and Freddie Mac to approve the deal between two companies. However, the deal is subject to conditions ensuring safety and soundness. Most notably, regulators capped each company’s servicing market share at 20% of Fannie Mae and Freddie Mac’s portfolios.
The regulatory approval moves Detroit-based Rocket one step closer to completing the mega-deal first. The green light from FHFA and antitrust regulators sets the stage for a vote by Mr. Cooper shareholders next week.
The acquisition will also create a mortgage giant servicing $2.1 trillion in loans across nearly 10 million clients. This represents one in every six US mortgages.
Rocket announced the all-stock deal in March. The deal offers Mr. Cooper shareholders 11 Rocket shares for each Cooper share, valued at $143.33 per share.
The combined entity is expected to deliver significant operational synergies. Rocket projects $100 million in additional pre-tax revenue from higher recapture rates. They also expect $400 million in cost savings through streamlined operations and technology investments.
Under the merger terms, Mr. Cooper chairman and CEO Jay Bray will become president and CEO of Rocket Mortgage. Both would report to Rocket Companies CEO Varun Krishna. Rocket founder Dan Gilbert will remain chairman.
The FHFA’s safety and soundness staff conducted what the agency described as “a rigorous analysis” of the proposed merger. The approval includes financial and operating safeguards beyond the 20% market share cap, though the agency did not disclose details.
This marks Rocket’s second major acquisition in 2025. The company acquired real estate platform Redfin for $1.75 billion earlier this year.
