Campaign India Team
Jul 12, 2012

Updated: Dentsu to acquire Aegis Group for $4.9 billion

GLOBAL - The boards of Dentsu and Aegis Group have announced an agreement on terms of a cash offer whereby Dentsu will acquire all Aegis stock for approximately £3.164 billion (US$4.9 billion), creating "a new global communications network for the digital age".

Tadashi Ishii and Jerry Buhlmann
Tadashi Ishii and Jerry Buhlmann

 

In a statement announcing the proposed acquisition, which still requires approval by Aegis shareholders, the companies said the combined entity will deliver "best-in-class brand, media, digital and marketing services for the combined client base" by combining "Dentsu’s leadership position in the Asia-Pacific region and rapidly growing presence outside Asia with Aegis’s leading position in Europe, strong footprint in Asia and Australia and its market leading growth in North America and the faster growing regions."
 
The companies expect the deal to be completed by the fourth quarter. 
 
“I am pleased to announce this exciting and transformational combination between Dentsu and Aegis," Tadashi Ishii, President and CEO of Dentsu, said in a statement. "Together, we will be able to deliver fully integrated and best-in-class services to our clients through a new global communication network born in the digital age offering a broadened service portfolio. Dentsu and Aegis will be the market leader in the Asia-Pacific region, enjoying a strong presence across Europe and the fastest growing agency network in the US.”
 
“This is a compelling combination of two great businesses that will create one of the world’s most dynamic marketing services groups – and the first to be born in the digital age,” said Jerry Buhlmann, CEO of Aegis. “We at Aegis are delighted at the prospect of being able to play a full part in helping  Dentsu create a platform for global growth and continued digital innovation. By forming the first communications group with true global reach, the growth strategies of both businesses will be enhanced as we provide more scale, geography, capability and investment to support clients.”
 
The news comes just a few months after Dentsu ended a long-standing relationship with Publicis, which bought back Dentsu shares valued at $845 million.

In a conference call late Thursday (Hong Kong time), the companies asserted that the deal was not predicated on realising cost savings through consolidation, and stressed that the footprints of the two networks are complementary.

Asked whether the deal was motivated by a desire to challenge WPP, Buhlmann responded that both companies are client-focused, and that if they focus on taking care of client needs, the competitive results 'will take care of themselves'.

Buhlmann refused to be drawn on whether Aegis' win of General Motors' global media business made the group a more attractive acquisition target, but did note that Aegis has not yet realised revenue from that business, which will kick in starting April.

Aegis Group will maintain its name and its individual brands in the market, the companies added.
 
Article first appeared on Campaign Asia.
Source:
Campaign India