Aug. 18 (Bloomberg) -- Pulte Homes Inc. completed its $1.3 billion purchase of Centex Corp., creating the biggest U.S. homebuilder amid signs the worst housing slump since the Great Depression may be nearing a bottom.

“The deal is both offensive and defensive,” said Pulte Chief Executive Officer Richard Dugas, who will lead the combined company. “We’re likely not to experience a lot of downside from here, but it’s quite possible that we could be operating in this tough environment for a while.”

Pulte’s purchase of Centex, which initiated the sale, is the first large combination of publicly traded homebuilders since the housing recession began. The companies expect to save $350 million annually by combining. American builders broke ground on more single-family homes in July for a fifth straight month, while the median price of an existing home dropped 15.6 percent from a year earlier, according to data from the Commerce Department and the National Association of Realtors.

The companies agreed to the deal in April after Centex lost 70 percent of its value in the previous 12 months and Pulte lost 30 percent. Shareholders of Pulte and Centex approved the transaction today at separate meetings. The companies, had they been combined last year, would have had revenue of $11.6 billion and reported a loss from continuing operations of $3.5 billion.

Seeking Profits

“I’m tired of losing money,” Dugas, 44, said in an interview. “We are squarely focused on returning to profitability as soon as we can.”

Buying Dallas-based Centex may give Pulte increased sales to entry-level buyers. Pulte got half its sales from developments for people aged 55 and older, while Centex’s primary customers are first-time consumers and buyers moving up to a larger house.

“Down the road, when the market recovers, it may turn out to be a good acquisition,” Joseph Snider, senior credit officer at Moody’s Investors Service in New York, said before the transaction closed. “There may be a lot of hiccups, bad hiccups along the way.”

An $8,000 federal tax credit for first-time homebuyers is bolstering the housing market and has a “reasonable chance” to get extended, Dugas said.

“I think it’s been helpful,” Dugas said. “I think the tax credit has been effective.”

Pulte agreed to pay 0.975 of a share for each Centex share. The transaction included $1.8 billion in debt. Pulte said on Aug. 11 it started a tender offer to purchase as much as $1.5 billion in debt belonging to both companies.

Pulte rose 1 cent to $12.33 at 4:01 p.m. in New York Stock Exchange composite trading. The shares rose 13 percent this year.

Investors also approved a name change. The Bloomfield Hills, Michigan-based plans to become PulteGroup Inc. It doesn’t have a timetable for the change. Tim Eller, Centex’s chief executive, becomes vice chairman and a consult to the new company.

“We’re going to be the first multibranded homebuilder,” Dugas said.

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net.

Last Updated: August 18, 2009 16:23 EDT