ConDig (30-Oct-17).  US homebuilder Lennar Corp is set to acquire rival CalAtlantic Group in a stock-and-cash deal valued at about $9.3 billion, which would create the largest homebuilder in the country.

The proposed deal comes as homebuilders battle higher land acquisition costs and a shortage of skilled labor that is driving up costs.

Miami, Florida-based Lennar said the combined company would control about 240,000 homesites and would have about 1,300 active communities in 49 markets across 21 states.

Lennar added that the deal is expected to generate annual cost savings and synergies of about $250 million, with about $75 million next year.

Stuart Miller, chief executive officer of Lennar, said the cost savings will come through efficiencies in purchasing, access to land, labor, overhead allocation and a greater number of deliveries.

“The combined land portfolio will position the company for strong profitability for years to come, as we continue to benefit from a solid homebuilding market, supported by job and wage growth, consumer confidence, low levels of inventory, and a production deficit,” he added.

The US homebuilding market continues to be underpinned by a robust job market and steady economy. But the industry is still being hampered by lot and labor shortages that has led to a supply squeeze.

Lennar completed a deal to buy fellow Florida-based homebuilder WCI Communities in February.

Earlier this year, D.R. Horton acquired a residential developer Forestar in a $560 million deal, which is expected to close in the first quarter of 2018.