IPG mulls global merger of Draft with FCB network

IPG sources say nothing has yet been decided but expect a decision next month.

Senior figures at Interpublic Group are playing down a possible merger between the holding company's Foote Cone & Belding and Draft networks.

IPG said that a potential merger is still in the preliminary stages.

It added that the company had yet to determine the structure and extent of a merger, and even to decide on whether it would happen at all.

The potential merger would bring together the advertising agency network FCB with the 28-year-old below-the-line operation headed by its founder, Howard Draft.

A senior source has confirmed that several possible scenarios are still on the table. One is the formation of an alliance under a so-called mini-holding company similar to McCann's Worldgroup. However, a full merger is also under consideration.

It is not known whether Draft or Steve Blamer, the global chief executive of FCB, would lead the combined group. However, sources point to Draft as the more likely candidate. The Draft network has 40 offices and 3,000 employees worldwide. FCB, in comparison, has 190 offices and 6,000 employees.

However, while Draft has been building its revenue base, FCB has lost status as a leading network in the US and UK over the past few years.

A merger would expand each network's offering to provide better integrated solutions to clients. It would also strengthen Draft's reach in Europe, particularly in Spain and Germany.

Talks about the possible merger are understood to have begun three months ago. Sources say a conclusion to discussions will come in May, with 15 May pencilled in as the date for an announcement.

This is not the first time that IPG has considered merging Draft with another one of its advertising networks.

In January 2003, IPG was in advanced discussions about merging Draft Worldwide with its advertising agency Lowe globally. The move could have improved the networks' integrated offers and saved costs.

However, in April of that year, IPG stepped back from a full merger. It announced that the two agency networks would instead form an alliance called Lowe & Draft to pitch for work together.

Sources close to Lowe say the merger talks were again resurrected last year, but have now firmly been called off.

- Opinion, page 27.