The deal was originally announced on July 28, 2014, and on Friday Zillow announced the Federal Trade Commission had completed its investigation into the merger. Today, the company announced the completion of the deal and the acquisition of Trulia under the parent company Zillow Group.
"Trulia has a phenomenal brand with a great audience," Zillow CEO Spencer Rascoff said. "We believe by adding it to our brands in Zillow Group we are well positioned to benefit from the migration of $13 billion of advertising onto the Internet."
Seattle-based Zillow will purchase San Francisco-based Trulia for about $2.5 billion in stock, paying 0.444 of one of its shares for each Trulia share. As of Tuesday's market close, Zillow shares were trading at $109.07 and Trulia shares were at $48.36. At the time the deal was announced it was valued at about $3.5 billion, but shares of both Zillow and Trulia have since dropped.
Zillow and Trulia have been rivals for the past nine years, fighting for sellers' and buyers' attention. Now they will work together under Zillow Group. In addition to housing Zillow and Trulia, the parent company will also include New York City real estate marketplace StreetEasy and rental search brand HotPads.
As a result of the merger, a total of 350 employees will lose their jobs -- 280 today and 70 over the next couple months.
The layoffs and restructuring costs will likely impact upon the next quarter's earnings, but Rascoff said he isn't too worried about the non-recurring items.
The deal "offers unprecedented scale," he said. "We're a media company and for any media company audience is critical to one's success. The combination of Zillow and Trulia's audience allows us to sell media to real estate agents and brokers at unprecedented scale."
Deutsche Bank analyst Lloyd Walmsley views the merger as a long-term positive, but he maintained his hold rating on the stock with a price target of $115.
"We expect more synergies over time though we likely will not get a lot more color here until Zillow can more closely pick through Trulia, and in the meantime, there will be restructuring costs," he wrote in a research note. "We review parts of the bear case but maintain our Hold rating given some risks (traffic slowdown, listings risk, competing portal initiatives) are offset by extreme short interest versus true float."
Zillow Group will inherit the trading history of Zillow Inc. under the ticker symbol "Z." Zillow Group management will host a conference call to discuss the close of the Trulia acquisition on Wednesday at 9 a.m. EST.
--Written by Rebecca Borison in New York
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