Toll Brothers is buying the homebuilding business of Shapell Industries for about $1.6 billion in a move that will strengthen its position in California.
Privately held Shapell, founded in 1955, builds luxury homes in the coastal markets of Northern and Southern California. The Shapell family will remain owners of its retail, commercial and multi-family businesses.
Luxury homebuilder Toll said that the deal gives it Shapell's land portfolio, which includes parcels in wealthy, high-growth markets such as metro Los Angeles, Orange County and the San Francisco Bay area.
Toll Brothers expects to acquire about 5,200 lots from Shapell. It plans to sell about $500 million worth of land after the buyout closes.
(Read more: And America's top housing market is...)