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Homebuilders' Record Deal Belies Industry's Anxiety About Taxes

  • Real estate lobbying groups oppose changes to deductions
  • Lennar’s takeover of CalAtlantic will form largest homebuilder
Contractors install a window on a home under construction at the Toll Brothers Inc. Cantera at Gale Ranch housing development in San Ramon, California, U.S., on Wednesday, Jan. 20, 2016. The U.S. Census Bureau reported a drop in new-home construction for December which probably reflects little more than a pause in a steady uptrend, as housing starts closed out the strongest year since 2007.
Photographer: David Paul Morris/Bloomberg

Lennar Corp.’s record takeover of CalAtlantic Group Inc. is a bullish sign for homebuilding in the U.S. Trade groups, meanwhile, worry that lawmakers are about to kneecap the industry.

Lennar said on Monday that it agreed to buy CalAtlantic for about $5.7 billion in cash and stock, a deal that would be the largest merger of U.S. homebuilders. Miami-based Lennar, which will have a stock-market value of about $18.5 billion after the takeover, will leapfrog D.R. Horton Inc. to become the country’s largest builder.