DOJ Allows Compass-Anywhere Deal After Overruling Staff (2)

Compass Inc. closed its acquisition of its largest rival, Anywhere Real Estate Inc., after Justice Department leadership overruled staff concerns that the deal could hurt competition in the real estate market, according to people familiar with the matter.

The Justice Department’s antitrust staff had recommended an in-depth investigation of the proposed combination of the two largest residential brokerages in the US, but were blocked by senior Trump administration officials, according to the people, who asked not to be named discussing a confidential matter.

The companies announced Friday that the deal had closed after shareholders gave their approval this week and the official waiting period for a federal antitrust review had passed without objections.

Compass shares were up about 8.6% from Thursday’s close at $13.31 in mid-day trading.

Compass, the largest US residential brokerage, said in September that it would acquire its next largest rival, Anywhere, which has brands including Coldwell Banker, Corcoran and Sotheby’s International Realty in an all-stock deal valued at $1.6 billion at the time. The final equity value of the deal was about $2 billion, according to data compiled by Bloomberg. The total value was about $5 billion, including debt.

Anywhere had sales of nearly $184 billion in 2024, compared with Compass’s roughly $231 billion, according to RealTrends, an independent platform that ranks real estate market players based on sales volume, among other metrics.

Market Shares

The combination gives the companies dominant market shares in areas including Manhattan, where the two control more than 80% of residential sales by dollar volume; Northern California, where their combined market share exceeds 70%; and the District of Columbia with more than 60%, according to RealTrends.

Compass had hired conservative lawyer Mike Davis, a confident of President Donald Trump, to help win approval for the merger, according to the people. Davis successfully argued to DOJ officials above antitrust chief Gail Slater, that the deal didn’t require extended antitrust scrutiny, some of the people said.

Compass and Mike Davis declined to comment. The Justice Department didn’t respond to a request for comment.

Democratic lawmakers had raised concerns about the large market shares created by the tie-up and last month urged the Justice Department and the US Federal Trade Commission to closely scrutinize the deal. In a Dec. 16 letter to the agencies, Senators Elizabeth Warren of Massachusetts and Ron Wyden of Oregon said the combination could lead to higher prices for consumers given Compass’s large market share.

The merger between the country’s two largest brokerages comes amid a larger industry feud over how homes are marketed and sold in the US. Compass has built a private listings network allowing sellers to quietly market properties with its own agents before posting on multiple-listing services, which home listings behemoth Zillow Inc. uses to power its home listings data. Zillow, which claimed to act in the interest of transparency in the housing market, enacted a policy banning listings that have been publicly marketed elsewhere, prompting legal action from Compass.

A federal judge in Manhattan is currently weighing a request by Compass to temporarily block Zillow from banning listings that have been publicly marketed elsewhere first.

Private Listings

Critics say Compass’ push to build its private listings network is meant to dominate listings and commissions. Those fears were amplified by the news of the merger, which would create a brokerage more than double the size of its closest competitor based on sales. Compass, however, argues that its marketing strategy allows sellers to test demand and pricing without leaving a record that could jeopardize future sales.

“We believe real estate portals should be centered around those who actually create the listings: real estate professionals,” Compass chief executive officer Robert Reffkin wrote in an open letter. “We will build a premier destination of brokerage-led sites founded on the core principle of ‘your listing, your lead.’”

Under US antitrust law, all deals above a certain size – $126.4 million as of 2025 – must file paperwork with the federal government and wait 30 days before closing. The 30-day waiting period is intended to allow the Justice Department and FTC to analyze whether a merger poses antitrust concerns and, if so, issue a so-called second request seeking additional information on the deal.

The Justice Department, which has long been interested in competition in US real estate markets, allowed the waiting period to expire on Jan. 2 even after staff had recommended further scrutiny, the people said. By avoiding a lengthy review, Compass was able to close the deal months ahead of schedule.

Attorneys General

The Justice Department’s decision not to seek an in-depth probe into the deal doesn’t eliminate all antitrust risk: state attorneys general have also been investigating and still could seek to challenge aspects of the deal, though that becomes more difficult once it closes.

The states have split from the federal government on merger challenges before, particularly during the first Trump administration. In 2019, for example, a group of states led by New York and California unsuccessfully sought to block T-Mobile US Inc. from acquiring Sprint after the federal government backed the deal with some conditions.

That dynamic has reemerged during Trump’s second term. A group of states is seeking to challenge the Justice Department’s settlement last year with Hewlett Packard Enterprise Co. over its purchase of rival Juniper Networks Inc. amid allegations that the Trump administration overrode recommendations by the agency’s antitrust division and agreed to the deal after lobbying by individuals close to the president, including Davis.

(Updates with shares in fourth paragraph.)

--With assistance from Paulina Cachero and Josh Sisco.

To contact the reporters on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net;
Alexandra S. Levine in New York at alevine136@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Claire Ballentine

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