AP Real Estate Writer

LOS ANGELES (AP) _ Standard Pacific Corp. and Ryland Group Inc. have agreed to merge in an all-stock transaction that will create a single homebuilder with operations in 17 states.

The two California-based homebuilders said late Sunday that their boards of directors have unanimously agreed to go forward with “a merger of equals” that would form a company with an equity market capitalization of about $5.2 billion.

The deal calls for Standard Pacific to conduct a 1 for 5 reverse stock split. Afterward, Ryland shareholders will receive 1.0191 shares of Standard Pacific stock in exchange for each Ryland share.

Standard Pacific shareholders will end up with about 59 percent ownership of the combined company, while Ryland shareholders own 41 percent.

The deal is expected to generate annual savings between $50 and $70 million.