* Weyerhaeuser to sell homebuilding business for $2.7 bln
* Weyerhaeuser shareholders to get control of Tri Pointe
* Tri Pointe to get 27,000 lots in high-growth markets
Nov 4 (Reuters) - Tri Pointe Homes Inc is buying Weyerhaeuser Co's homebuilding division in a $2.7 billion deal that will give it access to developed land in key markets such as California and Texas and make it one of the largest U.S. homebuilders.
Weyerhaeuser, whose shareholders will control Tri Pointe after the deal, has been looking to get rid of its homebuilding unit as it focuses on its core timber business.
Tri Pointe's existing management, including Chief Executive Officer Doug Bauer, will run the combined entity. Barry Sternlicht, whose Starwood Capital Group LLC owned a 38 percent stake in Tri Pointe as of March, will continue as chairman.
Weyerhaeuser said in June that the "improving fundamentals" of the U.S. housing market made it a prudent time to explore strategic options for its housing business.
M&A activity picked up in 2013 among U.S. homebuilders, which have been struggling to meet burgeoning demand for new homes due to a shortage of land ready to build on.
Rather than wait for developers to turn raw land into lots - a process that takes two to five years - smaller builders such as Ryland Group Inc and Meritage Homes Corp are finding it easier to buy companies that have access to land in key areas.
"What we're seeing is guys that are really looking for land opportunity and that's the big deal in the housing space today - finding land that is still attractively priced," Williams Financial Group analyst David Williams said.
Tri Pointe said the deal would give it control of about 27,000 lots and brands such as Pardee Homes in California, Trendmaker Homes in Texas and Maracay Homes in Arizona. It will also make Tri Pointe one of the top 10 homebuilders in the United States.
Irvine, California-based Tri Pointe went public in January and has a market capitalization of about $500 million. It builds houses in California and Colorado.
Weyerhaeuser and Tri Pointe are using a deal structure known as Reverse Morris Trust - a transaction that allows a parent company to sell its unit in a tax-efficient manner.
In that structure, a company spins off a unit that it wants to divest and that unit merges with a smaller company, but the smaller company runs the combined entity.
Weyerhaeuser said its shareholders will own 80.5 percent of the combined company after the deal is completed. They will receive about $2 billion in Tri Pointe's stock, based on Tri Pointe's Friday close of $15.38.
The Weyerhaeuser unit, Weyerhaeuser Real Estate Co (WRECO), will also pay $700 million in cash to its parent.
Weyerhaeuser said some assets of WRECO are excluded from the deal, which is expected to close by the end of the second quarter of 2014.
Deutsche Bank Securities is the financial adviser to Tri Pointe and Gibson, Dunn & Crutcher LLP is the legal adviser.
Sources close to the matter told Reuters on Sunday that Tri Pointe was nearing a deal to buy WRECO for about $2.7 billion.
Shares of Tri Pointe have risen 9 percent since Reuters first reported on Oct. 21 that it was in advanced talks to buy the Weyerhaeuser unit.