Two home-building giants will merge to form one single company in an equity market capitalization deal worth $5.2 billion. Standard Pacific and Ryland Group, both based in Southern California, will own or control 74,000 home sites from the merger. They have yet to pick a new name that they will be operating under.

Read moreBuild or Buy?

"Combining two industry leaders with nearly 100 years of homebuilding experience between them puts us in a strong position to benefit from the continued housing recovery," says Scott Stowell, Standard Pacific CEO, who will serve as the merged company’s executive chairman. "With this merger, we gain both geographic and product diversification, expanding our reach and enhancing our growth prospects in the entry level, move-up and luxury market segments."

Both companies combined last year built 12,600 homes, worth $5.1 million, in the 12 months ending March 31. The merger is expected to save both companies $50 million to $70 million a year.

The merged company will be building houses in 20 of the top 25 metro areas in the U.S., Stowell says. The company also plans to open a corporate office on the East Coast and its headquarters will be in California.

"Today our industry reaches a significant milestone as two of its best operators combine forces," says Larry Nicholson, Ryland’s CEO, who will become the CEO of the merged company. "With similar cultures and long histories of crafting quality homes and providing superior customer service, we are each proud of where we've been and look to the future confident that we will be better together."

The merger is expected to be completed by the fall.

Source: "Standard Pacific, Ryland Group to Merge in $5.2B Deal," USA Today (June 14, 2015) and "Home Builders Standard Pacific, Ryland Group Agree to ‘Merger of Equals,'" The Los Angeles Times (June 14, 2015)