Jones Lang LaSalle (JLL) is to buy rival King Sturge in what would be one of the largest tie-ups between property services firms since the global financial crisis.
The Chicago-based global firm announced today it would bolster its European business after agreeing to pay £197 million (€227.7 million; $319 million) for the London-based company. JLL will pay an initial £98 million in cash with the balance paid over the coming five years.
The deal is expected to close next week. It will result in a merged business of 5,300 staff working from 70 offices across 30 countries of Europe, the Middle East and Africa (EMEA).
The tie-up would see JLL, owner of private equity real estate firm LaSalle Investment Management, significantly expand its European operation, particularly in the UK where King Sturge has a particularly prominent position. The deal sees JLL inherit 43 offices in Europe, including 24 in the UK.
JLL said the purchase of King Sturge was primarily driven by the prospect of combining their capital markets teams, and their local and regional market teams. In the UK, JLL has a stronger market share in London, while King Sturge has a stronger presence in the country’s regions. King Sturge is also regarded as having a stronger presence in the UK industrial and retail markets.
In addition, the capture of King Sturge will add offices in central, eastern and south-eastern European markets where JLL has less of a presence.
Christian Ulbrich, chief executive officer for EMEA, said of the transaction: “The obvious strategic and cultural fit between JLL and King Sturge makes this a logical and very attractive proposition for both firms.”
The news of the merger comes in the same month rival firm DTZ said it had received a takeover approach from Saint George Participations (SGP), the French family-owned property company which owns the majority of its shares. The deal is widely thought to be a precursor to a merger with BNP Paribas Real Estate, the French property services firm. Once acquired, SGP is understood to be lining up a quick sale of DTZ to BNP Paribas, the French bank which owns BNP Paribas from when a merger could materialise.