Bates buys Korean agency to cement bond with Hyundai

The Bates network is set to increase its grip on the Hyundai business by taking over Diamond Advertising, which handles the carmaker’s account in its South Korean home market.

The Bates network is set to increase its grip on the Hyundai

business by taking over Diamond Advertising, which handles the

carmaker’s account in its South Korean home market.



Cordiant, the Bates parent company, is understood to be paying more than

dollars 100 million for Diamond in a deal that will allow its existing

management to remain in place for the next three years.



Hyundai is the largest Bates client in the US, where it bills dollars

108 million, and Michael Bungey, Cordiant’s chief executive, has been

trying to develop it into a global client.



Cordiant declined to comment on the sale, which was to have formed part

of this week’s announcement of the company’s purchase of the US-based

Healthworld Corporation (see story, p5). However, last-minute details

are believed to delayed the agreement.



The relationship between Bates and Diamond, an Hyundai subsidiary, began

when the two formed a joint venture in April 1996 called Diamond Bates

Korea, in which Bates had a 40 per cent stake.



The aim was to provide Diamond with more international access while

giving Bates and its then sister network, Saatchi & Saatchi, an entree

into the South Korean market.



Bates already had the Hyundai business in the US and its alliance with

Diamond helped pave the way for its appointment last year to run a

pounds 13 million pan-European campaign for the company.



The assignment led to the setting up of a separate unit within Bates to

avoid a clash with its pounds 100 million pan-European SEAT

business.



Diamond is understood to have been on the market for some time although

the depressed state of the Asian economy is said to have dissuaded other

networks from stepping in with offers.



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