Standard Pacific Corp. and The Ryland Group, both major homebuilders in Southern California, are merging into one company, the two revealed Sunday.

The new company, which hasn’t been named yet, will have an equity market capitalization of $5.2 billion and would own or control 74,000 home sites. The company announced that it will be building houses in 20 of the top 25 metro areas, and opening a corporate office on the East Coast.

From USA Today:

By merging, the two companies think they will see cost savings of $50 million to $70 million a year.

"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 market recovery," Standard Pacific CEO Scott Stowell said in a statement. "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."

Stowell will be executive chairman, while Ryland's chief, Larry Nicholson, would become CEO of the combined company.