Is News Corp Selling At The Lows? What You Need To Know About Mortgage Industry M&A

Last week, Rocket Companies Inc RKT Chief Financial Officer Brian Brown predicted the expected reduction in home buying activity in 2023 will force more industry consolidation, as large industry players have been active in the mortgage company market, scooping up smaller lenders — or at the least, poaching a number of departing staff.

Brown looks to be correct, as the executive’s predictions came just days before news broke of a multi-billion dollar consolidation deal in the depressed mortgage industry.

What Happened: Rupert Murdoch’s News Corp. NWSA is in talks to sell its Move Inc. online real estate business to CoStar Group Inc CSGP.

Move Inc is the parent company of Realtor.com, which owns Apartments.com, Moving.com, UpNest, and other real estate-related websites.

See Also: Rocket Power - CFO Predicts Consolidation To Drive Buying And Lower Home Prices

The deal, worth about $3 billion, could be announced within days, according to Bloomberg, which cited people familiar with the matter.

News Corp confirmed the discussions with Bloomberg, saying the talks are part of an ongoing effort to assess opportunities that will maximize shareholder value in a market that has been marred by high-interest rates.

News Corp, which acquired Move Inc in 2014 for $950 million shares ownership with REA Group Ltd., an online real estate business based in Australia that News Corp also controls.

REA Group owns 20% of Move Inc, while News Corp owns 80%.

Why It Matters: According to Brown, the M&A activity from last year due to margin compression will continue throughout 2023, but at a slower pace, given the capital the industry has built up over the past few years.

The industry consolidation should lead to potential homeowners enjoying the collateral damage in the form of lower home prices.

Read next: New Year, New Home? Housing Market Gears Up for a Busy Year Ahead