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AG Mortgage Investment Trust Inc. (NYSE: MITT), a publicly traded residential mortgage REIT, and Western Asset Mortgage Capital Corp. (NYSE: WMC) have entered into an agreement with AG Mortgage Investment acquiring Western Asset in a fixed exchange ratio stock/cash transaction.

With this merger, Western Asset terminates its previously announced acquisition agreement with Terra Property Trust Inc. Last month, AG Mortgage Investment made an unsolicited bid to acquire Western Asset.

“We are very pleased to have reached an agreement to acquire WMC in a combination that presents a compelling, value-maximizing opportunity for both MITT and WMC stockholders,” said T.J. Durkin, president and CEO at AG Mortgage Investment, who will be the chief executive of the combined company. “We are confident that combining these highly complementary portfolios will help scale our platform, generate greater operational efficiencies, cost synergies, and accretive earnings growth, and benefit all stockholders. We look forward to moving swiftly to complete this transaction.”

James W. Hirschmann III, chairman of WMC’s board of directors, stated the merger agreement ” is in the best interest of WMC’s stockholders. This combination will allow our stockholders to realize compelling value and we are excited about what our companies can achieve together.”