It’s the biggest by value. It could prove the hardest to execute. And it’s almost certainly the most remarkable.
Less than a week after putting pen to paper, the deal to combine DTZ and Cushman & Wakefield is already shaking up the advisory industry across the globe.
On Thursday, hundreds of staff from the two firms gathered in two separate locations in London to be briefed on what the deal means for them. The principal architects of the transaction, Brett White and Carlo Sant’Albano, flew in to set out their vision.
Talks between the firms had run for six months. And by last Sunday night the principal protagonists were ready to go public. In New York, the story broke in the Wall Street Journal. In Sydney – the home of DTZ’s former owner UGL, of course – the Australian Financial Review continued to stay on top of developments. And in Europe, it was EGi which revealed White’s plans for the business: in short, that this wouldn’t be the last corporate activity by the combined firm.
At $2bn, the deal size is the biggest even in a sector in which M&A activity has been rife for many years. With 43,000 staff, in 250 offices across 50 countries, bringing together the two firms will be a formidable challenge. But in Europe the business has the distinct advantage of having John Forrester, one of property’s best man-managers and someone with more experience than most of keeping a business focused while distractions rage elsewhere.
But it’s not just its size that makes this deal remarkable.
DTZ was technically the acquiring party, yet the combined business will take the Cushman name.
Sant’Albano had been chief executive of Exor, the majority owner of C&W, when he was parachuted in to chair the property adviser in 2011. Many had expected the Italian nobleman to return to the business arm of the Agnelli family once the sale completed. Instead he is staying with the enlarged C&W.
Meanwhile, White, the former CBRE chief executive who will now run the show at C&W, is making no bones about the fact that he now covets the number one position held by his former employer.
There are and will be hurdles, of course. Moody’s put DTZ’s credit rating on a negative outlook on the news, worried about the leverage on the deal. And the mobiles of many of the two firms’ rising stars haven’t stopped ringing as rivals seek to promise them a better future elsewhere.
The message from clients so far is that the combined firm offers a third way to a choice-starved market. It is no longer a choice between just JLL or CBRE for many of the world’s largest corporates.
Nevertheless, the integration challenges will be formidable. There is overlap in roles and in offices, in the UK and in the US, where Cassidy Turley is yet to be fully digested. But the size of the potential prize makes it worthwhile.
White – and Sant’Albano for that matter – wants that number-one slot. They may well get it. And for everyone else seeking to service global investors and occupiers, that ladder has just been pulled up a little further.
■ When we published the latest EG Power List in March, we ranked White second (to the chancellor of the exchequer, I hasten to add; we stand by that assessment).
The last time he had ranked on the list, it was as chief executive of CBRE. March, remember, was post the Cassidy Turley acquisition and pre the C&W talks reaching an advanced stage. We said: “White will not be looking just to build a top-four global player, he will want to challenge CBRE and JLL.”
And who was number three? C&W chief executive Edward Forst.
