Foote Cone Belding is attempting to build a European network of its
own after last week’s dissolution of the alliance between its True North
parent and Publicis.
Both parties bowed to the inevitable with a deal allowing the
Paris-based Publicis to take full control of its joint venture European
network in return for True North acquiring FCB agencies in London,
Paris, Athens and Lisbon.
The four shops will provide the nucleus of a network when they are put
together with Wilkens International, the former Ayer Europe operation
acquired by True North earlier this month.
As a result, the Wilkens agencies will be rebranded as FCB, except in
Germany where it is the country’s oldest and best-known agency.
Harry Reid, the president of FCB International, will run the network out
of London, helped by a transitional committee comprising senior
executives from Wilkens and major FCB European offices. It will decide
how the new operation is to be structured.
Although the split means FCB has to build a European network virtually
from scratch, Chris Rendel, the managing director of FCB in London and a
member of the committee, denied it was at a disadvantage.
’Most of our competitors put their networks in place ten or 15 years
ago,’ he said. ’We can position ours in a new and unique way.’
One matter to be resolved following the split is whether FCB Europe will
continue working with Optimedia, the Publicis-FCB media buying
operation, or be forced by conflicting business to build its own media
Reid said: ’I don’t rule out a separate media function but we’d like to
see if we can make it work with Optimedia first.’
The effect of a switch from Optimedia would have a relatively minor
effect on the media network’s UK office, which works with Publicis on
the majority of its business.
Also to be decided is what, if any, part will be played in the new
network by Leagas Shafron Davis. Although Wilkens has a 12 per cent
stake in the agency, the True North takeover allows Leagas Shafron to
buy the shares back if it wishes.
Leagas Shafron could decide to stay on board if there is a prospect of
getting a significant amount of referred business. Ron Leagas, the
Leagas Shafron chairman, said: ’We’re in the middle of discussions.’
The establishment of FCB Europe is part of a wide-ranging divorce
settlement thrashed out during a two-day meeting in Paris last month
between Maurice Levy, the Publicis chairman, Brendan Ryan, his FCB
counterpart, and other members of the True North board.
The deal not only ends all legal claims each side has made against the
other, but commits FCB to selling to Publicis its interest in a South
African agency. The settlement will also help Levy establish separate
operations in Argentina, Australia, New Zealand, India and Thailand.
Both parties will service each other’s clients in countries where having
two agencies would be impractical.
True North will increase its stake in Publicis Communication, the
Publicis advertising division, from 20.8 per cent to 26.5 per cent,
while Publicis’s 20 per cent share in True North sustains its position
as the US group’s largest shareholder. Each company will maintain a seat
on the other’s board of directors.
Along with Reid and Rendel, the transitional committee will consist of:
Robert Hamer (the chairman of FCB UK), Philippe Gaumont (the chief
executive of FCB Paris), Fernando Okana (the chief executive of FCB
Spain), Roy Powell (the chief executive of FCB International), Holger
Uhlhorn (the chief executive of Wilkens) and Andrew Stewart (the
financial director of Wilkens).
The agreement ends what has turned out to be one of the most ill-starred
global agency pairings and reflects how much the aims and ambitions of
Publicis and True North have changed since they came together in
Optimedia’s main UK clients
General Accident pounds 4.6m
Hewlett-Packard (pan-Euro) pounds 30 m
L’Oreal pounds 9.4 m
Lancome pounds 3.2m
Mastercard pounds 5.4 m
Mercantile Credit pounds 5.4 m
MFI pounds 18 m
Renault pounds 34.6m
Royal Doulton pounds 3m
Whirlpool pounds 2m
Whitehall Laboratories pounds 5.5m
Other accounts pounds 5.4 m
Total pounds 126.5m
Citibank pounds 2m
Daily Mail pounds 5.3m
Royal London Assurance pounds 1.8m
Tropicana pounds 2m
Other accounts pounds 1.05m
Total pounds 12.15m
Bright Reasons pounds 4m
British Airways pounds 15m
CIC Video pounds 2.6m
Gateway 2000 pounds 3.8m
Glaxo corporate pounds 2m
People’s Bank pounds 4m
Pizzaland pounds 2.2m
Ralph Lauren (pan-Euro) pounds 10m
Other accounts pounds 9.5m
Total pounds 54.7m
Source: ACN MEAL/Optimedia.