HEADLINER - Decaux bid upsets 30 years of Anglo-French competition - The French firm’s offer for the More Group is making waves, CLAIRE BEALE writes

It’s 1970 and two idealistic poster men - a Mr Rory More O’Ferrall and a Mr Jean-Claude Decaux - meet for lunch. From opposite sides of the English Channel, they’re in the same business and, over a good bottle of French wine, they shoot the breeze about working together. Let’s imagine it’s a pleasant lunch and the two men go their separate ways on good terms.

It’s 1970 and two idealistic poster men - a Mr Rory More O’Ferrall

and a Mr Jean-Claude Decaux - meet for lunch. From opposite sides of the

English Channel, they’re in the same business and, over a good bottle of

French wine, they shoot the breeze about working together. Let’s imagine

it’s a pleasant lunch and the two men go their separate ways on good

terms.



Almost 30 years later and their successors meet for the first time last

week in, shall we say, less pleasant circumstances. For when More

Group’s chief executive, Roger Parry, and Decaux junior, the suave,

refined Gaul, Jean-Francois, finally saw the whites of each other’s eyes

after eight years of fierce UK rivalry between the two companies, cards

were firmly on the table. New Decaux made a pounds 475 million cash

offer for More last Monday (Campaign, 3 April).



It’s all a far cry from the day, nine years ago, when the family firm

launched by JFD’s papa in 1962, arrived in the UK armed with a natty

line in street furniture (loos, bus shelters and so on), a typically

Gallic air of refined superiority and 37 poster panels in

Kingston-upon-Thames. More Group had 20,000 panels.



Now, the proposed merger - just weeks after a rival bid for More by the

US-based Clear Channel - would create a company controlling almost 90

per cent of the UK street furniture market.



Great news for the outdoor industry, Jean-Francois Decaux says. Decaux’s

arrival here back in 1989 was, according to JFD, good news for the UK

outdoor market. ’In 1989, people were a bit sceptical about what I was

telling them, they were afraid of different things but now they all

agree the best thing to happen to UK outdoor was the entry from

Decaux.’



Decaux came in with quality product and a slick approach, stimulating

the rest of the industry to raise its game. ’Companies like Mills &

Allen and Maiden saw the need to upgrade their plant dramatically,

because they saw the large investment made by Decaux and could no longer

pitch for business with ugly billboards.’



But that, counters More’s group development director, Coline McConville,

is the crux of the issue; with monopoly can come complacency. ’Decaux is

a superb competitor, a strong and aggressive rival, and without such

fine competition we wouldn’t have had to keep investing in our product

or keep our prices in check.’



And it’s not only advertisers and agencies who have benefited from this

dynamic competition. According to McConville, the local authorities,

whose street furniture contracts Decaux and More regularly pitch

head-to-head for, have been the real winners of this rivalry. ’We’ve had

to keep our margins down,’ she admits.



But JFD is adamant the poster industry needs to consolidate. ’The best

thing that could happen to the European outdoor industry is the

acquisition of More Group by Decaux in order for a European company to

win market share in countries such as the US and to invest in products

and research.’



’Pah!’ spits McConville. ’That suggests a European, if not a global,

monopoly. That would be a great shame for the entire industry.’ Somewhat

tellingly, in France, Decaux’s home ground, the company was referred to

the competition body, the Conseil de la Concurrence, last year.



Undaunted, JFD is confident the UK regulatory authorities will give the

More acquisition a green light, and that the industry at large has no

qualms about the idea. ’I don’t think advertisers and agencies should be

worried about the merger of More and Decaux. The combined market share

will be only 24 per cent of the outdoor market, so it will be a marginal

increase on More’s 21 per cent share. We’re competing against the bus

medium, where TDI has a mono-poly, against other poster companies and

against other media. That’s why I think the Office of Fair Trading is

going to let this happen. It’s already bought into the argument by

accepting the acquisition of Buspak by TDI.’



For Decaux, More will not only provide market domination but a

management framework for its global ambitions. ’Basically, it’s my

father, my brother and myself and we’ve split up the world between us.

Now we need to have a management structure in place which is more of the

Anglo-Saxon culture and that’s what the More Group - particularly Roger

Parry with his McKinsey background - will bring to our company.’



Parry himself is forced to remain uncharacteristically tight-lipped but

JFD is vocal in his determination. ’It’s a critical moment. We’re in the

process of developing a global business and this acquisition will make

it happen even faster.’



And if the More bid doesn’t go through, he insists that Decaux will

continue its aggressive expansion policy. ’I will be very disappointed

but I’ve been fighting to expand my family’s business for 15 years and I

will continue to do so.’



THE DECAUX FILE

1982   Launches the Decaux company in Germany, now its second-biggest

       market

1989   Launches Decaux in the UK

1998   Mounts a pounds 475 million takeover bid for the More Group.



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