For any serial Sorrell-watcher, there was never much doubt that the man would get his meat. Over recent years Sir Martin has proved a deadly opponent at the takeover table. And whether he's driven by a very personal crusade to be number one or by consistently shrewd business logic (and the two, of course, are not incompatible), his strike rate is formidable: 3:0 to the Brits, as WPP wags have put it.

This time round there has been some debate over whether Grey will add $1.4 billion worth of extra depth to the WPP proposition, or whether it would have been better to use the money to acquire more WPP shares. But Sorrell's determination to win the bidding war is evidence enough for many that the prize will certainly enhance WPP's portfolio and deliver improved shareholder returns. Grey represents not only a clutch of enviable blue-chip client relationships, but, as the world's seventh-largest agency group, an additional $1.3 billion of revenue on margins that are way below the WPP norm.

Those blue-chip accounts can, of course, choose to walk at any time.

The fact that they are used to the high levels of service implied by Grey's margin structure underlines the cultural differences with the higher margin (13 per cent to Grey's 6 per cent) WPP model. Yet it's naive to assume that Sorrell has not smoothed his path to purchase with considered conversations with key Grey clients.

In this respect, Grey's Procter & Gamble relationship will no doubt have been top of the agenda and Grey's former owner, Ed Meyer, will have played an important role in reassuring P&G and others that WPP's are safe hands. Unilever, a WPP client, must also have signalled its acceptance of cohabitation.

As advertising lore has it, P&G and Unilever could never co-exist in a single holding company. But P&G is the world's biggest advertiser and in some respects a more attractive business partner for any communications group than rival Unilever, beset by some thorny financial issues. For Sorrell, to have a hold on both camps is a personal and professional triumph and in all the excitement over the acquisition, it's easy to lose sight of the watershed that this will represent if he can pull it off.

Concerns over client conflict have a crippling effect on the industry, fuelling an over-supply of agencies, often precluding better economies of scale and compromising investment in people and systems.

And yet conflict is not an issue that concerns those same client companies when it comes to appointing the best law firm, for example. One agency's conflict is another supplier's category specialisation.

Of course, within WPP there will be distinct operating units serving the Unilever and P&G businesses; Sorrell has emphasised that he has no plans to roll Grey advertising into one of his existing networks. And it's unlikely that the rivals will co-operate on pooling their media buying muscle anytime soon. But with P&G and Unilever set to share the same holding company partner and enjoy some mutually beneficial sharing of resources, however oblique, a new precedent has been set.

It's a precedent that could shape the future structure of the advertising business as agency consolidation reaches its natural conclusion. And if more clients come to accept the benefits and efficiencies of cohabitation (on different sides of a Chinese wall, of course), there's no doubt that a healthier and stronger advertising industry will emerge.


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