Pulte snaps up rival Centex for $1.3b

Pulte Homes Inc agreed to buy Centex Corp for $1.3 billion in stock to create the largest US homebuilder by revenue.

Pulte agreed to pay 0.975 of a share for each Centex share, valuing Centex stock at $10.50 per share, 38 percent more than Tuesday's closing price of $7.62, the Bloomfield Hills, Michigan-based company said yesterday in a statement. The transaction, approved unanimously by both companies' boards, includes $1.8 billion in net debt, Pulte said.

The two companies are betting that by combining they will be better able to survive the worst housing decline since the 1930s, with new home sales down more than 75 percent since their July 2005 peak. The deal also will give Pulte access to states with stronger new home sales, including Texas and the Carolinas.