CB Richard Ellis Group Inc invests $1 billion in Netherlands based ING Group

CB Richard Ellis Group is to purchase majority of ING Real Estate Investment Management (ING REIM) business. The investment is to be undertaken in two separate transactions and will cost CB Richard Ellis a combined price of around US$1 billion. Further to that, as part of the overall transactions, ING has also agreed to sell up to roughly US$100 million of its equity interest in existing ING REIM funds.

In the separate transaction, ING agreed to sell the private market real estate investment manager of its US operations, Clarion Partners, to Clarion Partners management in partnership with Lightyear Capital LLC for the US$100 million. Clarion Partners has €16.5 billion in assets under management as of 31 December 2010. Lightyear is a US-based private equity firm.

Jan Hommen, CEO of ING Group, commented that with these transactions, ING continues to deliver on its strategic objectives of reducing exposure to real estate, simplifying the firm and further strengthening its capital base.

The investment sees CB Richard Ellis Group, Inc acquire ING REIM Europe, ING REIM Asia and Clarion Real Estate Securities (CRES), ING REIM’s US-based manager of listed real estate securities, as well as part of ING’s equity interests in funds managed by these businesses.

ING REIM Europe, ING REIM Asia and CRES combined have €44.7 billion in assets under management as of 31 December 2010. CB Richard Ellis Group is a leading global commercial real estate services firm.

The Real Estate Investment Management business in Australia (ING REIMA) is not included in these transactions. Within the context of the previously announced evaluation, ING finalized the review of the strategic options and implementation has commenced. As a result ING will undertake a phased withdrawal from its Australian real estate investment management activities in a timely and controlled manner.

In the transaction with CB Richard Ellis, ING Insurance has agreed to continue its asset management mandate with CB Richard Ellis as the new manager of the funds. ING Bank will continue to have an equity interest in some REIM funds in Europe, Asia, the US and Australia. The equity stakes held by the Bank will be monetized over time as it continues to steadily reduce its exposure to real estate.

Combined, the transactions are expected to result in an after-tax gain on disposal of approximately €500 million at current exchange rates. The final terms are subject to potential adjustments at closing, customary for this kind of transaction.


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