Cordiant plans to grow after buying Diamond

LONDON - The Cordiant group this week set its sights on Hyundai business across the world after taking over the home market agency of the South Korean industrial giant.

The Cordiant group this week set its sights on Hyundai business

across the world after taking over the home market agency of the South

Korean industrial giant.

Diamond Advertising, whose acquisition was exclusively forecast by

Campaign last month, will form the hub of a new network intended to

fulfil the group’s desperate need for a major globally aligned

client.

Working alongside the Cordiant-owned Bates network, the Diamond

operation will expand to meet Hyundai’s requirements in a number of

undisclosed markets.

The new arrangement will not affect Hyundai’s current relationship with

Bates USA, which handles the company’s pounds 68 million car business in the US, or with George Patterson Bates, which runs Hyundai in

Australia.

But it will result in Atlas, the unit set up by Bates in the UK to

handle a pounds 13 million pan-European campaign for Hyundai, being

rebranded as Diamond.

Atlas was established to avoid conflict with Bates’ pounds 100 million

pan-European SEAT business.

Cordiant will pay up to pounds 82 million over the next two years for an

80 per cent stake in Diamond, South Korea’s third-largest agency. It was

set up by Hyundai in 1983 and the company will retain a 20 per cent

share of the agency, which handles 80 per cent of its domestic

business.

Cordiant, which has had a relationship with Diamond for the past three

years, was able to take advantage of the battered state of the South

Korean economy.

Now Cordiant bosses are hoping that the acquisition will be the catalyst

for a global alignment with Hyundai.

The company, whose portfolio includes not only the Hyundai and Kia car

brands but electronics, construction and engineering interests,

organises its agency arrangements on a country-by-country basis.

’There’s a lot to go for,’ Michael Bungey, Cordiant’s chief executive,

said.

Bates has struggled to find sufficient global business to bind its

network together since its almost catastrophic dumping by Mars five

years ago.

British American Tobacco and Warner Lambert currently provide the global

glue but more is needed.

Cordiant acknowledges that the Korean ad market was hit hard by the

South East Asia recession but says it is recovering strongly and will be

boosted further by the 2002 Word Cup, to be hosted jointly by Korea and

Japan and for which Hyundai is a major sponsor.

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