Publicis wins Saatchis in pounds 1.24 billion merger

By JOHN TYLEE, campaignlive.co.uk, Friday, 23 June 2000 12:00AM

Saatchi & Saatchi clients will gain access to the burgeoning marketing services operations of the network’s new Publicis parent once the French group’s pounds 1.24 billion takeover, creating the world’s fifth largest communications group, has been completed.

Saatchi & Saatchi clients will gain access to the burgeoning

marketing services operations of the network’s new Publicis parent once

the French group’s pounds 1.24 billion takeover, creating the world’s

fifth largest communications group, has been completed.



Publicis has been developing its below-the-line muscle as it expands

internationally and Maurice Levy, the Publicis president, said this week

that he hoped to draw Saatchi clients into them.



The Publicis marketing services line-up includes Publicis Dialog, the

electronic communications specialist Publicis Technology and the US

marketing firm Frankel & Co.



’Saatchis has very few marketing services operations but we are very

strong in that area,’ Levy said. ’There are a lot of our services that

could be offered to Saatchi clients.’



However, Levy insisted that the Saatchi and Publicis names would be kept

pure with no office mergers anywhere in the world apart from the

possibility of some shared administrative and financial operations.



’We don’t want to send the wrong signal,’ Levy added. ’We are not

merging the Saatchi and Publicis brands and if we think it’s right for

them to compete for a piece of new business, they will.’



Meanwhile, Levy and Bob Seelert, the Saatchis chairman, claimed that

potentially conflicting clients, notably L’Oreal and Renault at Publicis

and Procter & Gamble and Toyota at Saatchis, were relaxed about the

deal.



Levy said he had consulted with the chief executives of L’Oreal and

Renault, whose reactions had been ’friendly and warm’. P&G was also said

to be content. Seelert said: ’It has realised how much its conflict

policy was enfeebling its agencies.’



For Publicis, the capture of the most famous name in British advertising

comes four years after its attempt to become a global player on the back

of True North ended in an acrimonious divorce from its US partner.



But Levy insisted he was in no hurry to sell the 10 per cent stake in

True North still held by Publicis, making it the company’s biggest

individual shareholder, despite the Saatchi deal. ’True North shares are

not performing as we would like but it’s clear the company will have to

acquire or be acquired,’ he claimed. ’This will make our stake more

valuable and we would like to take advantage.’



The deal will also trigger huge payments to 93 senior Saatchi

executives, turning some into paper millionaires and precipitating a

fall in the Publicis share price on the Paris Bourse on Tuesday. But

Seelert said he was not expecting a mass exodus of managers looking to

cash in.



The only confirmed departure is that of Wendy Smythe, the Saatchi

corporate affairs director, who will receive pounds 6 million. ’Because

of what she does, there isn’t a role for her,’ Seelert said. ’She’s

known this from the start and isn’t fussed about it. Her contract will

be honoured.’



Levy predicted no job losses among the 12,500 Publicis employees and

5,500 Saatchi staffers.



Levy also refuted suggestions that Publicis had been too generous in

offering 500p per share for Saatchis. ’We’d have loved to pay less, but

we believe it was fair,’ he said.





PUBLICIS

1927      Founded by Marcel Bleustein-Blanchet

1940      Closes during Second World War

1946      Agency reopens

1963      Wins Renault

1971      Maurice Levy joins

1972      Paris HQ destroyed by fire. Opens London office

1981      Opens New York office

1988      Forms global alliance with FCB

1996      Works with M&C Saatchi to win BA global task

1998      Acquires US hotshop Hal Riney

2000      Acquires Fallons and Saatchi & Saatchi

Clients   Renault, Nestle, L’Oreal, Hewlett-Packard, Whirlpool

SAATCHI & SAATCHI

1970      Launches as creative hotshop

1975      Acquires Garland-Compton

1979      Successful election campaign for Conservatives

1982      Wins British Airways

1984      Buys Hay Group, US management consultants

1986      Acquires Ted Bates

1987      Fails in bid for Midland Bank. Financial problems

1995      Maurice Saatchi ousted. M&C Saatchi launches Renamed Cordiant

1997      Cordiant demerges Saatchis and Bates subsidiaries

2000      Acquired by Publicis

Clients   P&G, Hewlett-Packard, Sony, Toyota



This article was first published on campaignlive.co.uk

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