(John Salustri, Glen Thompson, Diana Rodriguez and Stacey Corso teamed on the reporting of this article.)

LONDON & NEW YORK-GlobeSt.com has confirmed that CB Richard Ellis has agreed to buy Insignia Financial Group in a $400-million deal that would create what is being touted as the world's biggest real estate brokerage firm. The formal announcement is expected to be made in New York next week.

Sources close to the negotiations in London confirmed that the deal had been made, under which CB Richard Ellis will take over Insignia. CBRE currently has around 10,000 employees in more than 250 offices across 47 countries and Insignia has more than 6,200 people in 95 offices across the world. By comparison, Cushman & Wakefield more than 11,000 staff in 154 offices and Jones Lang LaSalle employees 7,200 employees in more than 100 markets. Insignia is a New York Stock Exchange-listed company with total revenues in excess of $735 million.

The source said Insignia's management had been on the verge of taking the company private through a management buyout in a move that would allow founder Andrew Farkas to concentrate on his private investment interests. But CBRE stepped in with a bid significantly in excess of the current $7 Insignia share price.

In Europe Insignia's top management looks set to survive the expected cull. Insignia's Mike Strong and Alan Froggett are tipped to take the two top jobs, raising a question mark over the future of CBRE's European President Vaughan Thomas.

The deal also sees the reunification of the Richard Ellis Brand. Insignia retained the rights to the name in the UK, and continued to trade as Insignia Richard Ellis, while CBRE--which owned the rights to the name everywhere else in the world--operated there as CB Hillier Parker.

The agreement puts an end to months of speculation and rumors that a deal between the two firms had been set.

CBRE managing director Victor Dominguez refused to discuss the matter. "We don't have any comment," Dominguez tells GlobeSt.com. "We don't comment on any market rumor."

(Stacey Corso is editor of Real Estate New York, a sister publication of GlobeSt.com.)

Instant Insights /

CBRE to Acquire Insignia Financial in $400M-Plus Deal

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