Finally some mortgage news that doesn’t involve a closure.
Earlier today, MGIC Investment, the largest provider of private mortgage insurance, agreed to buy close rival Radian Group in a deal worth roughly $4.9 billion.
After the deal was announced, shares of MGIC surged 11.4% to $70.09, while Radian rose 9.3% to $66.51 in NYSE trading.
Radian Group shareholders will receive 0.9658 MGIC shares per Radian share and the deal is expected to be complete in the fourth quarter of 2007.
The company will take on the name of MGIC Radian Financial Group, and will provide private mortgage insurance both domestically and internationally with more than $290 billion issued.
Financial analysts are bullish on the deal, with perceived cost cuts of $130 million, though initial restructuring costs could be as high as $125–$150 million.
The deal comes on the heels of a recent government ruling that permitted taxpayers to deduct private mortgage insurance.
Check out the latest list of mortgage mergers, closures and layoffs.