Rewrites throughout, adds context on Nine Entertainment in paragraph 4, Domain shares in paragraph 3, adds details on REA in paragraphs 8-11 and analyst comments in paragraphs 6, 7 and 12

By Himanshi Akhand and Rishav Chatterjee

May 9 (Reuters) - U.S. real estate firm CoStar CSGP.O will acquire Domain DHG.AX for A$3 billion ($1.92 billion) including debt, the Australian property listings platform said on Friday, in a bid to create a well-capitalised rival to News Corp's REA.

After weeks of due diligence by CoStar, which owns a 16.9% stake in Domain, the companies have agreed on the U.S. firm's A$4.43 apiece offer.

Domain shares gained as much as 5.2% to A$4.47 and were set for their biggest single-day rise in nearly a month.

Media firm Nine Entertainment NEC.AX, Domain's largest shareholder, has expressed its support of the deal and would be receiving A$1.4 billion for its 60.1% stake. Nine shares jumped as much as 8.1% to A$1.61.

CoStar acquired a 16.9% stake in Domain on February 21, ahead of an initial takeover offer of A$4.20 apiece, which was subsequently raised. The acquisition would be put to a shareholder vote in mid-August.

Spatium Capital portfolio manager Jesse Moors said he would be watching how Australia's Foreign Investment Review Board considers the sovereignty risk with the Australian public's residential housing data being owned by an American real estate firm.

Nine, which owns popular newspapers such as The Age and Australian Financial Review, has failed to match Domain with the success that News Corp NWSA.O-controlled rival REA REA.AX has enjoyed.

REA's market value reached A$33.16 billion, after jumping more than 160% since 2020.

Domain is currently valued at A$2.69 billion.

Shares in REA fell up to 4.2% and were set for their biggest one-day loss since early April.

"We do not expect a material impact on REA's position over the next 1-3 years, especially given REA's product execution and expect marketing schedules to initially expand if CoStar is successful in growing Domain's audience," said Citi analysts.

CoStar, originally an information and analytics provider for commercial real estate, has in recent years shifted focus toward building a dominant presence in online property marketplaces.

($1 = 1.5659 Australian dollars)

(Reporting by Himanshi Akhand and Rishav Chatterjee in Bengaluru; Editing by Rashmi Aich)

((Himanshi.Akhand@thomsonreuters.com;))