UK's Savills buys Eastdil Secured for $1.1 billion to expand US presence but Middle East tensions hit shares

March 12 (Reuters) - UK's Savills SVS.L said on Thursday it would buy real estate investment bank Eastdil Secured in a $1.1 billion deal, including debt, as it looks to expand in North America and deepen its capital-markets presence, though concerns over Middle East tensions drove shares lower.

The deal positions the property adviser to benefit from a pickup in real estate dealmaking, as U.S. investment banking revenues rise on the back of stronger M&A pipelines and firmer debt underwriting activity.

Eastdil Secured specialises in mergers and acquisitions, debt placement, structured credit and loan sales. It generates 76% of its revenue from North America, and has a diversified global footprint across Europe and Asia Pacific.

Under the deal, Eastdil's 85 senior employees will collectively hold 6.3% of the enlarged Savills. The transaction will be funded through debt and the issue of new ordinary shares in Savills, representing about 16% of the enlarged company.

Savills expects the deal to deliver low-to-mid teens underlying earnings per share accretion in 2027 and generate direct revenue synergies of at least 60 million pounds annually over the medium term.

MIDDLE EAST CONCERNS WEIGH ON SHARES

The acquisition comes after Savills also reported strong 2025 results with revenues rising 6% and underlying profit before tax increasing 11.4%, driven by a particularly strong fourth quarter in its transactional business.

However, its shares dropped nearly 5% in early trading as escalating tensions in the Middle East have clouded the global economic outlook.

"It is difficult at this stage to assess the potential impact of the conflict in the Middle East, including any broader macroeconomic or geopolitical effects," Savills said.

It has around 800 employees in the region, which contributes roughly 5% of underlying profit.