Japan’s homebuilder Sekisui House to acquire US peer M.D.C. Holdings for $4.95 billion

Japanese homebuilder Sekisui House, Ltd. (SKHSY) is set to acquire U.S. homebuilder M.D.C. Holdings, Inc. (NYSE:MDC) in an all-cash transaction valued at around $4.9 billion. The agreement aims to enhance Sekisui House’s presence in the U.S. housing market, offering MDC shareholders $63.00 per share in cash, indicating a 19% premium over MDC’s closing stock price on January 17, 2024, and a 41% premium over its 90-day volume-weighted average trading price. Following the announcement, MDC stock surged by 16.9%.

Yoshihiro Nakai, Representative Director of the Board President, Executive Officer, and CEO of Sekisui House, expressed enthusiasm about the acquisition, emphasizing its significance in advancing Sekisui House’s strategy to expand its U.S. presence and bring technological innovation and philosophies to U.S. homebuilding.

The acquisition aligns with Sekisui House’s broader goal of supplying 10,000 homes outside of Japan by FY2025, surpassing initial expectations. The transaction is anticipated to be finalized in the first half of 2024, subject to conditions such as approval by MDC’s stockholders, regulatory clearances, and other customary requirements. Notably, key MDC shareholders, including Larry Mizel and David Mandarich, and affiliates owning approximately 21.2% of MDC’s shares, have committed to voting in favor of the acquisition.

The acquisition marks a strategic move for Sekisui House, aiming to leverage M.D.C. Holdings’ expertise and market presence in the United States. The deal’s financial terms, with a 19% premium over the closing stock price and a substantial 41% premium over the 90-day average trading price, underscore the significance of the partnership.

Sekisui House’s CEO, Yoshihiro Nakai, sees the acquisition as a means to not only strengthen their foothold in the U.S. housing market but also to bring their advanced technology and innovative approaches to the American homebuilding sector. Nakai expressed confidence that this move aligns with their broader corporate objectives, emphasizing the value they aim to deliver to customers through this expansion.

The surge in M.D.C. stock following the announcement indicates a positive market response to the strategic alignment of these two prominent players in the housing industry. The commitment from major M.D.C. shareholders, including Larry Mizel and David Mandarich, further adds to the confidence in the success of this acquisition.

As the transaction progresses towards finalization in the first half of 2024, Sekisui House anticipates navigating various conditions, including securing approval from M.D.C.’s stockholders and obtaining necessary regulatory clearances. This acquisition not only signifies a significant business move but also reflects the dynamic nature of global partnerships in the real estate and construction sectors.

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Keywords: Japan’s homebuilder Sekisui House, US peer M.D.C. Holdings for $4.95 billion, Japan’s homebuilder