Mr. Cooper (COOP) soars on $9.4B Rocket Companies takeover: what investors need to know

Rocket Companies (NYSE: RKT) has announced the acquisition of Mr. Cooper in an all-stock transaction valued at $9.4 billion.

The deal comes just weeks after Rocket’s acquisition of real estate listing company Redfin, signaling an aggressive expansion strategy.

Shares of Mr. Cooper surged more than 27% pre-market following the announcement.

On market open, the stock was up by more than 16%.

However, Rocket Companies was down by more than 7%.

Under the terms of the agreement, Mr. Cooper shareholders will receive 11 Rocket shares for each share of Mr. Cooper common stock.

This value Mr. Cooper shares at $143.33 based on Rocket’s closing price as of March 28, 2025, representing a 35% premium over Mr. Cooper’s 30-day volume-weighted average price.

Once finalized, Rocket shareholders will own approximately 75% of the combined company, while Mr. Cooper shareholders will hold the remaining 25%.

A combined servicing portfolio of $2.1 trillion

With the acquisition, Rocket will significantly expand its mortgage servicing business.

The combined company will oversee a servicing book of $2.1 trillion across nearly 10 million clients, representing one in every six mortgages in the US

Rocket aims to leverage its mortgage recapture capabilities to enhance long-term customer relationships and drive higher loan volumes.

“Servicing is a critical pillar of homeownership – alongside home search and mortgage origination,” said Varun Krishna, Rocket CEO.

“With the right data and AI infrastructure we will deliver the right products at the right time. That’s how we build lifelong relationships, by proactively unlocking benefits and meeting needs before they arise. We look forward to welcoming Mr. Cooper’s nearly 7 million clients.””

Mr. Cooper Chairman and CEO Jay Bray echoed this sentiment, emphasizing the complementary strengths of the two companies.

“By combining Mr. Cooper and Rocket, we will form the strongest mortgage company in the industry,” Bray said.

“We are creating an end-to-end homeownership experience backed by leading technology and customer care.”

Revenue growth and cost synergies

The deal is expected to generate significant financial benefits.

Rocket anticipates an additional $100 million in pre-tax revenue due to improved mortgage recapture rates and the integration of its title, closing, and appraisal services into Mr. Cooper’s operations.

Additionally, the company projects $400 million in pre-tax cost savings from streamlining operations, reducing corporate expenses, and optimizing technology investments.

Following the acquisition, Rocket’s combined servicing portfolio will generate steady earnings growth regardless of interest rate fluctuations.

In 2024, the two companies’ servicing businesses collectively generated $4 billion in revenue.

Rocket has a history of strong client retention, boasting an 83% mortgage recapture rate—triple the industry average.

The acquisition of Mr. Cooper is expected to enhance this figure further, leveraging data from nearly 7 million additional clients and 150 million annual customer interactions.

Outlook and regulatory approvals

The transaction, subject to regulatory approvals and shareholder votes, is expected to close by early 2026.

Mr. Cooper will also pay a $2.00 per share dividend to its shareholders before the deal’s completion.

With this acquisition, Rocket aims to reinforce its position as a dominant force in the U.S. mortgage industry, delivering an integrated and data-driven homeownership experience.

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