Long-running rumours resurfaced at MIPIM earlier this year that BNP Paribas Real Estate was in talks to acquire Strutt & Parker. Here EG looks at the implications.
The 132-year-old partnership has been the subject of sales talks for a number of years and finally appointing boutique investment bank Evercore in January 2016 to review its future, despite continued affirmations from outgoing senior partner Andy Martin (pictured) that the business would remain independent.
SEE ALSO: Strutt & Parker – independent and built to stay that way
CBRE, Cambridge-based Bidwells and BNP PRE have all been routinely linked to an acquisition of the agent.
So, as BNP PRE reportedly enters into advanced talks to buy Strutts, EG takes a look at what a combined company would look like. BNP PRE, with its heavy commercial exposure, could benefit from Strutt & Parker’s residential business, but how would the combined business in the UK stack up against some of the biggest players in the industry?
If BNP PRE was to complete a deal with Strutts it could more than double its UK business and significantly increase its residential footprint. While historically Strutts has reported about 40% of its turnover from residential deals, the sector only accounts for about 15% of BNP PRE’s UK business.
A combined agent, with £206m of revenues, would be among the top five agents in the UK, just above GVA. Although Strutts does not break down its regional data between commercial and residential turnover, assuming 40% of its revenues came from residential business, about 28% of the combined firm would be residential.
And in London offices, EG data shows that a merger would help deliver double-digit market shares in both the City core and West End (12.4% and 13.4% respectively).
A deal, however, has not been confirmed and both parties declined to comment.
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