Stockholders of Compass and Anywhere Real Estate have overwhelmingly approved the proposed merger between the two real estate giants, clearing the way for the $1.6 billion deal to close as early as Friday, Jan. 9.
At special stockholder meetings held Wednesday, Jan. 7, approximately 99% of votes cast at Compass’s meeting approved the proposal to issue shares of Compass Class A common stock to Anywhere stockholders in connection with the merger, according to a joint press release.
Meanwhile, owners of approximately 72.4% of Anywhere’s outstanding shares of common stock voted to approve the proposal to adopt the merger agreement.
“We are pleased with the strong support from our and Anywhere’s stockholders in approving this transaction,” said Robert Reffkin, founder and chief executive officer of Compass.
“Today’s outcome reflects confidence in our shared vision to empower real estate professionals with everything they need to grow their business and better serve their clients.”
The merger is expected to close on Jan. 9, subject to the satisfaction of customary closing conditions.
Once complete, the deal is expected to value the combined companies at over $10 billion, creating the largest real estate brokerage company in the world.
An antitrust hurdle cleared, but approval comes amid legal challenges and scrutiny
The stockholder approval comes just days after the companies cleared a significant antitrust hurdle, with the Hart-Scott-Rodino (HSR) Antitrust Improvements Act waiting period just having expired on Jan. 2, with neither the Department of Justice or the Federal Trade Commission raising concerns during the review period.
The HSR Act gives the government advance notice of major mergers and acquisitions, allowing a waiting period to review for competitive harm.
But the overwhelming stockholder support also comes amid legal challenges that emerged in the weeks leading up to the vote.
Three lawsuits were filed by purported Anywhere stockholders in New York and New Jersey courts between Dec. 10-18, alleging that the joint proxy statement/prospectus contained misleading or incomplete information regarding the merger.
The complaints—filed by individuals referred to as McDaniels, Marino and Drulias in an SEC filing—sought multiple forms of relief, including orders requiring Anywhere to make corrective disclosures, injunctions to halt the merger unless additional information is provided and potential damages if the transaction proceeds.
The merger also drew scrutiny from lawmakers. In a letter sent Dec. 16, U.S. Senators Elizabeth Warren and Ron Wyden raised concerns over the potential impacts to the industry and consumers.
“The Compass-Anywhere merger threatens to stifle consumer choice and fair industry competition while entrenching existing antitrust and price manipulation concerns that have been at the center of mounting litigation,” Warren and Wyden wrote in a joint statement. “These risks demand close scrutiny under federal antitrust laws.”
