Pulte Homes Inc. and Centex Corp. say a planned $3.1 billion merger will make the combined companies the nation’s largest home builder with the strongest cash position in the industry.

The merger — already approved by both companies’ boards of directors — will create a single company with $3.4 billion in cash and $1.8 billion in net debt. The companies together closed 39,000 sales in 2008, with revenue of $11.6 billion.

Pulte Homes Inc. and Centex Corp. say a planned $3.1 billion merger will make the combined companies the nation’s largest home builder with the strongest cash position in the industry.

The merger — already approved by both companies’ boards of directors — will create a single company with $3.4 billion in cash and $1.8 billion in net debt. The companies together closed 39,000 sales in 2008, with revenue of $11.6 billion.

Fitch Ratings affirmed Pulte’s debt ratings, and said it was prepared to raise ratings on Centex’s unsecured debt because the company will benefit from the merger.

The combined company — to be known as Pulte, and headquartered in Bloomfield Hills, Mich. — will "have a strong liquidity position, a more diversified product line, an expanded market presence in top markets, and the potential for significant cost savings from operating efficiencies," Fitch analysts said. The board of directors of Pulte will be expanded to include four current members from the Centex board.

Pulte CEO Richard Dugas Jr. said Centex’s presence in the entry level and move-up categories is complemented by Pulte’s strength in the move-up and "active adult" segments. Centex also has "sizable" land holdings in Texas and the Carolinas, "two areas that continue to exhibit strength in the face of today’s difficult housing market," Dugas said in a press release.

The combined company’s brands will include Fox & Jacobs Homes, DiVosta Homes and Del Webb.

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