IPG overtakes WPP with True North acquisition

Interpublic has jumped ahead of WPP as the world's largest

advertising group after this week's pounds 1.47 billion acquisition of

True North FCB Worldwide.



True North's main agency headed by Brendan Ryan, its chief executive,

will operate as the third global agency network of IPG alongside

McCann-Erickson and the Lowe Group.



Observers expect most of the True North operating units such as FCBi

(CRM), Marketing Drive Worldwide (sales promotion) and BSMG (PR) to

remain aligned, for now, with FCB, although managers are examining

potential realignments.



Interpublic also inherits True North's 45 per cent stake in Modem Media,

the new-media agency.



The deal throws up several client conflicts. Tropicana, owned by Quaker

Oats, is handled by FCB, while Coca-Cola works with McCann and Lowe

Lintas.



FCB also works with SC Johnson, while McCann and Lowe work with Unilever

and McCann also works with Reckitt Benckiser. However, with no network

merger planned between FCB and either Lowe or McCann, it is unlikely to

spark any immediate reviews.



The deal means the demise of the True North name and the likely closure

of its Chicago headquarters in order to eliminate what Interpublic's

chairman, John Dooner, called 'obvious corporate overhead

redundancies'.



David Bell, True North's chairman and chief executive, who will become

the vice-chairman of Interpublic, said: 'We're looking at all areas

where savings make sense but we are not announcing them at the moment.'

Dooner claimed the merger had 'advanced our ability to address

client-led trends towards globalisation and integrated marketing

communications'.



Analysis and Perspective, p2.



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