Centex, Pulte shareholders OK deal, creating largest U.S. homebuilder
— -- The deal matches Pulte's division for retirement-age homebuyers with Centex's focus on young first-time buyers. By absorbing Centex, Pulte is now positioned to sell homes in 29 states and Washington D.C., under brands such as Del Webb, DiVosta and Fox & Jacobs. Pulte also gains large tracts of land in Texas, North Carolina and South Carolina.
"It was a very satisfying victory," said Richard Dugas Jr., Pulte's president and CEO, who now adds the title of chairman. He said he expected the transaction to be finalized by the end of the day.
The combined company is keeping the Pulte name and headquarters in Bloomfield Hills, Mich., but not all of the employees. Dugas didn't say how many people might lose their jobs, but said some cuts could come "right away."
Timothy Eller, the CEO of Dallas-based Centex, will serve as a director and vice chairman as well as a consultant for two years.
Pulte hopes to save $250 million by eliminating operations, staff and offices it doesn't need. It projects another $100 million in savings from paring down interest charges on debt.
Under the terms of the all-stock deal, announced in April, investors in Centex will receive 0.975 shares of Pulte common stock for each Centex share they hold. Pulte's stock traded in a tight range Tuesday, closing up 1 cent at $12.33 a share.
After the stock transfer, Pulte shareholders will own roughly 68% of the company, while Centex shareholders will own about 32%.
Pulte and Centex management had urged their shareholders to approve the takeover, arguing doing so would create a stronger, new company that will be able to thrive amid a housing downturn that has decimated builder profits and forced many smaller companies out of business.
The combined company now dwarfs Fort Worth-based D.R. Horton, which builds homes in 27 states and was ranked the top builder in the U.S. last year by Builder magazine. Pulte held the No. 2 spot, followed by Centex.
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