Newco to merge trading services
By MATTHEW COWEN, campaignlive.co.uk, Friday, 27 July 2001 12:00PM
The senior management of Publicis and Cordiant have signalled that
Newco, the holding company set up to house the two agencies, will now
pool its negotiating resources across all media.
The UK-based entity will go further in the scope of its combined trading
than the Magna Global unit set up by Interpublic to handle TV
negotiations last week.
Newco will be 75 per cent owned by Publicis, with Cordiant taking a 25
per cent stake. Cordiant holds an option to sell its share to Publicis
for a minimum of £75 million, but Cordiant's chief executive,
Michael Bungey, said that it was unlikely to exercise this option.
"We are looking to get the benefit of scale in every activity of the
company," Bungey said of the negotiations plans. "It's important that we
establish a competitor position in terms of what we can do for our
"We'll be looking to go further," Optimedia's chairman, Simon Lloyd,
agreed. "What we do is likely not just to be TV buying but to cover
every aspect of the business."
Yet there are no immediate plans to move trading operations into a
separate, independent unit, as IPG has done with Magna. Bungey
emphasised that all operations will remain within the two agencies for
now, but hinted that the merger of agency units could come on to the
"Now that the deal has been announced we can get down to sorting out
exactly how the company will be run," he said. "The question of what
might or might not be merged will largely come down to those
discussions. We have and will keep two brands, which is an important
element in handling conflicting business."
Several conflicting clients have seen their accounts brought into the
same holding company. Zenith handles Mars and United Airlines, while
Optimedia holds the Nestle and British Airways accounts.
Newco's management will be announced at the end of September. It is open
to appointing a chief executive from outside the agencies.
The merger followed Havas' bid for Tempus. "This is another step toward
consolidating into five or six global media companies," Zenith's
chairman, John Perriss, said.
This article was first published on campaignlive.co.uk
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