The regulatory approval moves Detroit-based Rocket one step closer to completing the mega-deal first announced in March. The green light from FHFA and antitrust regulators sets the stage for a Sept. 3 vote by Mr. Cooper shareholders.
If finalized, the acquisition will create a mortgage giant servicing $2.1 trillion in loans across nearly 10 million clients, representing one in every six US mortgages. Rocket announced the all-stock deal in March, offering 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 and $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, reporting 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.