What happened Shares of homebuilder CalAtlantic (NYSE: CAA) are up 22% as of 10:30 a.m. EDT today. The spike comes on the heels of Lennar (NYSE: LEN) announcing it will buy CalAtlantic for $9.3 billion. For reference, shares of Lennar are down 2.7% as of this writing. Image source: Getty Images. So what In a deal to consolidate the homebuilding industry, Lennar is offering 0.885 shares of its company for every share of CalAtlantic outstanding, which would value CalAtlantic at $51.34 per share. CalAtlantic investors can also opt to take $48.26 per share, but that offer is only limited to $1.2 billion. The combined company, if the deal were to close, would have a top-three market share ranking in 24 of the 30 largest markets in the country. We're starting to see a wave of consolidation in the homebuilder business as labor costs start to increase and demand for homes is high. Back in February, Lennar acquired WCI Communities, and D.R. Horton (NYSE: DHI) recently announced it was taking a 75% stake in land developer Forestar Group to obtain its developed lots. CAA data by YCharts Now what It's hard to tell right now whether or not this was a great deal for Lennar, but for CalAtlantic shareholders, this must feel good. The success of this deal will depend on how much cost the two can wring out of their respective businesses and leverage their combined footprint. Considering Lennar's size already, it certainly has a chance of doing well. 10 stocks we like better than CalAtlantic GroupWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and CalAtlantic Group wasn't one of them! That's right -- they think these 10 stocks are even better buys. Click here to learn about these picks! *Stock Advisor returns as of October 9, 2017Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.