Tri Pointe Homes Inc is now in the final stage of buying Weyerhaeuser Co.'s homebuilding unit for $2.7 billion, according to two people familiar with the matter. If successful, this deal would make Tri Pointe one of the top 20 largest homebuilders in the US.
The two companies are working out the last details of the deal and that they will announce the outcome possibly on Monday.
The said deal stipulates the use of a structure called Reverse Morris Trust. This transaction allows a parent company to sell its subsidiary in a tax-free manner by combining a spin-off unit with a statutory merger.
One of the people said that after the deal, Weyerhaeuser shareholders would own 80.5 percent of the merged company while the remaining 19.5 would be owned by Tri Pointe shareholders.
Tri Pointe is one of the first homebuilders to go public in almost 10 years as the financial crisis hit the housing sector in the US and is now on the process of slowly recovering.
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