Two Harbors Shares Jump 13.42% as UWM Announces $1.3B All-Stock Acquisition

The share price rose to its highest level so far this month, with an intraday gain of 13.42% on Dec. 18. The surge followed the announcement of a $1.3 billion all-stock acquisition by UWM Holdings Corporation, which seeks to combine Two Harbors’ $176 billion mortgage servicing rights (MSR) portfolio with its own operations. The deal, expected to nearly double UWM’s MSR portfolio to $400 billion, has positioned the merged entity as the eighth-largest U.S. mortgage servicer.

The transaction, offering a 21% premium for Two Harbors’ shares, reflects strategic value in its capital markets expertise and recurring revenue potential. Analysts highlight $150 million in annual cost and revenue synergies from integrating the portfolios, enhancing operational efficiency and cash flow. The all-stock structure, tax-free for Two Harbors’ shareholders, has bolstered investor confidence, with premarket trading showing a 9% surge in TWO’s shares despite a 5.7–7.4% drop in UWM’s stock.

Post-merger, UWM shareholders will own 87% of the combined company, while Two Harbors’ shareholders retain 13%, aligning long-term incentives. Governance changes, including an expanded UWM board, aim to ensure balanced decision-making. The acquisition is projected to close by Q2 2026, pending regulatory approvals, with UWM’s CEO emphasizing the strategic timing to capitalize on in-house servicing growth.

Enhanced liquidity from a 93% increase in UWM’s public float further supports market optimism about the merger’s value creation potential.