- Homebuilders Standard Pacific and The Ryland Group announced Sunday they will merge into a single company with a market value of $5.2 billion.
- The southern California-based companies said they expect to save $50 million to $70 million per year by merging. The new firm, which would become the fourth-largest homebuilder in the U.S., has not yet been named.
- After the deal's close, Standard Pacific stockholders will own 59% of the merged company, and Ryland stockholders will have the remaining 41%. Ryland Chief Executive Larry Nicholson will become president and CEO of the combined company, while Standard Pacific CEO Scott Stowell will serve as executive chairman.
The combined firm will build in 20 of the top 25 U.S. metros, according to Stowell. With the larger company, leaders plan to expand its reach by establishing a corporate office on the East Coast in addition to its dominating West Coast presence.
Stowell said in a statement. "With this merger we gain both geographic and product diversification, expanding our reach and enhancing our growth prospects in the entry level, move-up and luxury market segments."
The merger was unanimously approved by the boards of both companies. It now must be approved by shareholders of the two homebuilders, and is predicted to be finalized in early fall.
The 2015 Fortune 1000 list ranked Ryland and Standard Pacific closely, with Ryland at #830 and Standard Pacific at #887. Both companies jumped more than 100 spots from 2014's list.