Sekisui House to acquire M.D.C. Holdings for $4.9 billion, aiming to become fifth-largest U.S. homebuilder

Japan’s Sekisui House Ltd is buying Denver-based homebuilder M.D.C. Holdings Inc. for $4.9 billion in a deal that would make the Japanese company the fifth-largest builder of new homes in the U.S.

In a significant move, Japan’s Sekisui House Ltd has announced its acquisition of Denver-based homebuilder M.D.C. Holdings Inc. for $4.9 billion. The deal positions Sekisui House as the fifth-largest builder of new homes in the U.S. and marks a strategic expansion in the American housing market.

The definitive agreement outlines that Sekisui House will acquire M.D.C. Holdings for $63 per share, representing an all-cash offer and a substantial 19% premium over M.D.C. Holdings’ closing stock price on the day before the announcement. M.D.C. Holdings, founded in 1972, operates under the Richmond American Homes brand and has a significant presence in California, Florida, Texas, and 13 other states.

Sekisui House, based in Osaka, Japan, is a prominent global player in the construction and real estate sector with operations in Australia, the UK, China, and Singapore. The acquisition of M.D.C. Holdings aligns with Sekisui House’s strategy to strengthen its position in the U.S. market and attain its goal of building 10,000 homes outside of Japan by fiscal year 2025.

The transaction is anticipated to close in the first half of this year, subject to shareholder and regulatory approvals. With M.D.C. Holdings in its portfolio, Sekisui House aims to address the high demand for quality homes in the U.S. market and expand its ability to serve customers in key states poised for continued growth.

The acquisition comes amid a challenging period for the U.S. housing market, marked by a sales slump driven by factors such as rising mortgage rates, soaring home prices, and a limited inventory of resale homes. However, new construction homes have seen more resilience, with sales up 3.9% year-to-date as of November 2023.

Sekisui House’s expansion in the U.S. new-home market follows its gradual growth through strategic acquisitions, including brands like Woodside Homes, Holt Homes, Chesmar Homes, and Hubble Homes. The move reflects the company’s confidence in the long-term prospects of the U.S. housing market and its commitment to meeting the evolving needs of homebuyers.