Cushman & Wakefield and DTZ agree 2 billion merger

12 May 2015 Consultancy.uk

A merger worth $2 billion (€1.8 billion) will see real estate advisors Cushman & Wakefield and rival DTZ brought together under the name Cushman & Wakefield. With the amalgamation – which was primarily made possible by the effort of DTZ’s owner TPG Capital – one of the largest real estate advisors in the world comes into being.

The international real estate advisory market is currently dominated by two large parties – CBRE and JLL. The two have considerable turnover, CBRE has a turnover of $9 billion and JLL $5.4 billion. Until now the two market leaders have been able to operate generally unencumbered, however, this stability may be about to change.

Merger of DTZ and C&W
Cushman & Wakefield will be the name under which DTZ and Cushman & Wakefield – two international real estate advisors – will in the near future be fused to become the third largest player in international real estate advisory. With 43,000 employees and combined revenues of $5.5 billion, the new Cushman & Wakefield may become a serious threat to CBRE and JLL.

Merger Cushman & Wakefield + DTZ

The merger was recently disclosed and is largely due to the efforts of TPG Capital. private equity firm, together with joint venture partners PAG Asia Capital and OTTP (the Ontario teachers’ pension fund), bought DTZ in November 2014 for $1.05 billion. The ambitious partners acted quickly to add US real estate advisor Cassidy Turley to the mix for $600 million at the start of 2015. With the addition of Cushman & Wakefield, the investors are taking one step further in the expansion of the real estate company toward becoming a truly international player. It is expected that the deal will be closed by the end of the year.

Cushman & Wakefield
Real estate advisors Cushman & Wakefield is currently still, for the largest part, in the hands of the Italian Agnelli family, known for their part in Fiat Chrysler. The head office is located in New York and the turnover for 2014 was $2.85 billion, with a resultant profit of $61.6 million. In February Bloomberg disclosed the news that Agnelli’s had asked investment banks Goldman Sachs and Morgan Stanley to look for buyers for the real estate advisory.

The name Cushman & Wakefield will be used by the merged entity, which comes into being after the addition of the same named business to real estate advisors DTZ by its owner – for $2 billion. The combined real estate advisors will offer a complete services portfolio, which it says will provide “a unique combination of established presence in local markets with significant scale of core services in major markets worldwide”. The new entity will be led by Brett White, the former CEO of rival CBRE and an industry veteran with more than 30 years’ experience.

Edward Frost and Brett White

According to ascending CEO and Board Chairman, White, “DTZ is elated to be merging under the prominent Cushman & Wakefield brand,” going on to say: “The companies have remarkably complementary skills and reach in different geographies – whether in New York, London or Shanghai, this will be a formidable combination.”

In reaction to the merger, Edward Frost, President and CEO from the current Cushman & Wakefield: “This transaction builds upon the considerable momentum we’ve achieved over the past 18 months and positions Cushman & Wakefield to deliver incremental value to clients worldwide from a broadened and strengthened global service platform, the combined company will truly represent the best our industry has to offer, with an enhanced ability to help clients achieve their goals and to deliver rewarding prospects for the tremendous Cushman & Wakefield team.”

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