Leo Burnett pips IPG to seize MacManus prize

Leo Burnett has beaten Interpublic in a dramatic race to strike a deal with MacManus, the holding company of D’Arcy, MediaVest and NW Ayer.

Leo Burnett has beaten Interpublic in a dramatic race to strike a

deal with MacManus, the holding company of D’Arcy, MediaVest and NW

Ayer.



A merger between the Leo Group and the MacManus Group was announced this

week as the two advertising giants set up a new global holding company,

provisionally named BDM, with the help of an estimated dollars 400

million investment from Dentsu.



Dentsu will take a 20 per cent stake in BDM. The deal will be formalised

in January and the new company will aim to go public within a year.



BDM will be advertising’s fourth biggest holding company, with combined

billings of dollars 14.5 billion (dollars 27.5 billion including

Dentsu).



BDM is expected to keep Leo Burnett and D’Arcy as separate entities and

the formation of BDM, which will be based in Chicago, is not expected to

throw up any global client conflict. The Burnett and MacManus Groups,

numbers ten and 11 in the world, share a number of global clients

including Procter & Gamble, Coca-Cola, Pillsbury and Philip Morris.



Roger Haupt, who takes over from Rick Fizdale as chief executive officer

of the Leo Group on 1 January, will become CEO of BDM, while Roy

Bostock, chairman and chief executive of MacManus, will become chairman

of the new holding company. Dentsu will also be represented on the BDM

board.



Haupt said: ’While the Leo Group and the MacManus Group have performed

well as private companies, today’s marketplace demands strongly

capitalised global agencies. A public offering will give us the

resources to expand the company’s business and attract and retain top

talent.’



Interpublic was known to have been close to a deal with MacManus shortly

before the news broke about BDM.



Bostock said: ’We have carefully evaluated a range of options that would

enable us to better service our global clients. We intend to be the

premier global communications company.’



Full analysis, p2.



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