CB Richard Ellis today announced that it is to buy one of its major property services rivals Trammell Crow in a $2.2bn (£1.16bn) deal

A merger of the two New York Stock Exchange-listed companies will boost CBRE’s revenues to around $4.4bn (£2.3bn) and 21,000 employees, and cement its position as the world’s largest property services firm.

In a takeover that was revealed by Property Week last year (news, front page 05.08.2005), CBRE is paying $49.51 a share in cash. The deal is valued at $2.2bn, including the assumption of Trammell Crow's corporate debt, as well as transaction and integration costs. It is expected to close either in late 2006 or early 2007, subject to approval by Trammell Crow 's shareholders.

‘Our strategic objective has long been to create the market-leading commercial real estate services firm delivering comprehensive solutions to our clients. Well targeted acquisitions have played a pivotal role in our strategy," said Brett White, CBRE’s president and chief executive officer. ‘With the acquisition of Insignia in 2003, we achieved pre-eminence in our transaction business. Now the acquisition of Trammell Crow creates the best-in-class corporate outsourcing and institutional property management business, and further augments our transaction business.

Trammell Crow specialises in the corporate outsourcing and corporate real estate markets. As a result of the transaction, CBRE’s contractual revenues associated with outsourcing are expected to increase from a 8% to 18% of total revenues, based on 2006 expected results.

CBRE will assume Trammell Crow’s near 20% stake in Savills, but is expected to sell it.