Building a Brand
Two mergers up the scale of their firms’ size and reach

by Zach Mortice
Assistant Editor

Summary: The RTKL-ARCADIS and RMJM-Hillier mergers each unite a U.S. design firm with a European firm in the hopes of giving each company more access to markets across the globe. The European firms (ARCADIS and RMJM) are both capitalizing on their U.S. counterparts’ strong design brand identity, and both merged firms are hoping their new size and increased capabilities can offer clients “one-stop shopping” for building services.

When the Earth’s 7th billion child is born sometime in the year 2013, chances are that no matter where they live, within a few years the reach of international branding will have seared the image of McDonald’s golden arches or Coca-Cola’s red, sun-dappled iconography into their still-forming minds. Could this child pick out, say, a university science building in China designed by RMJM Hillier, or perhaps a soccer stadium in Brazil by RTKL and ARCADIS? Probably not, but it wouldn’t be bad for business if they could. In just this spirit, each of these newly merged pairs of architecture and engineering firms are reaching across continents to create global design brands.

The summer’s second merger combined Baltimore’s RTKL with Arnhem, Netherlands-based ARCADIS, uniting a venerable East Coast design firm with a global engineering and project management company. The resulting engineering, planning, and design behemoth will have 12,000 employees and offices around the globe.

RTKL Chair Paul Jacob, AIA, says ARCADIS approached him about a merger a bit less than a year ago. It was completed as of July 6 and financial details were not disclosed. In starkest terms, the deal means that RTKL gets more access to ARCADIS’s international markets, and ARCADIS gets RTKL’s widely respected design brand. “We’ll be the lead in architecture, planning, urban design, and all the things that were typical to us,” says Jacob. This merger could become what is considered “typical” for RTKL. Jacob says the firm is looking at the possibility of more mergers and acquisitions in Europe and Asia to “really make the company global.” (RTKL already has offices in London, Madrid, Shanghai, Tokyo, and Seoul.)

RTKL is looking at more mergers and acquisitions in Europe and Asia to make the company global

“Over the last five years, we’ve been trying to get higher in the value chain, work for higher quality clients, and do more work for fewer clients than to do a thousand teeny little things for a million clients,” Jacob says.

Worldwide design
Hillier’s namesake founder Robert Hillier, FAIA, says his merger is about creating a “worldwide design delivery system,” which will put four sets of 250 architects on four different continents.

“We’ve got real offices, real people in these countries,” RMJM CEO Peter Morrison says of the merger. “What that means is that we have a real local knowledge of these areas. That allows us to push planning though more quickly.”

The RMJM/Hillier merger will put four sets of 250 architects on four different continents

The $30 million that Edinburgh, Scotland-based RMJM paid for Hillier will deliver them fully formed into the lucrative American East Coast architecture market; the Princeton, N.J.-based Hillier’s home turf. The deal (completed in June) also gets them the all-important Hillier brand, with their extensive expertise in educational and science design. Hillier in turn will get access to clients from RMJM’s 11 international offices, and experience with hospitality design.

Size = speed
In the context of the broader economy, consolidation has come late to architecture because of its inherently local orientation. Now more than ever, firms are starting to see the benefits of making international partnerships, and AIA Chief Economist Kermit Baker, Hon. AIA, says these mergers are likely to continue as long as the American economy stays strong,

And as more firms consolidate, they’re able to offer large clients the wide array of services they’re demanding. Some of these high-priced clients want more than internationally recognizable branded design; they want the convenience of one-stop shopping. As the merger between RTKL and ARCADIS illustrates, a client could purchase planning, design, engineering, infrastructure, and facilities management services from the combined firm without ever adding another name to their Rolodex. “Some firms [are offering more services] organically by adding staff, some do it with strategic partnerships, some of them do it with strategic acquisitions and mergers, but I think it’s all motivated by the same thing. It’s really the client who’s looking for it,” says Baker.

High-priced clients want more than internationally recognizable branded design; they want the convenience of one-stop shopping

Jacob says large clients like the U.S. federal government, public/private partnerships, and Chinese developers have all influenced RTKL to find ways to deliver a broad spectrum of building and design services.

One such group of RMJM’s clients are the financiers of the stratosphere-scraping high-rises sprouting up in the Mid East. These clients are making desert cities like Dubai’s (where RMJM has its first Mid-East office) world-class architectural oases that they want built yesterday. Since 2004, the 162-story Burj Dubai tower (designed by Skidmore, Owings, and Merrill, an early pioneer in integrated engineering and design) has risen one story every three days, recently becoming the world’s tallest building, and even taller buildings have been proposed in Dubai.

“The Middle East guys are looking at getting buildings up so quickly,” says Morrison, whose firm is establishing offices in Abu Dhabi and Doha. “Unless it’s a one-stop shop, the process is going to be too elongated.”

But will it sell in Peoria? Or Peru?
Baker says architecture will still be a local service despite these international mergers, while corporate architecture executives talk of using size and international presence to inject cross-cultural expertise into different geographies. Being more local than the locals has always been the key mechanism that makes international branding successful both as a distinct cultural artifact and as a coherent part of a commodified whole. After all, a Coke commercial in China looks very different from a Coke commercial in America, but they’re both recognizable beyond any language or culture barrier. The corporate leaders of these firms must hope that the same will be true for internationally branded architecture.