Merger creates media titan

The balance of power among the top global media players is set for a dramatic shake-up when Leo Burnett’s Starcom and MacManus’ MediaVest merge to form a new top three network next year.

The balance of power among the top global media players is set for

a dramatic shake-up when Leo Burnett’s Starcom and MacManus’ MediaVest

merge to form a new top three network next year.



Combining the media clout of Starcom, MediaVest and Dentsu - which is

taking a 20 per cent stake in the new holding company - would create a

new media superpower with billings in excess of dollars 13 billion, and

up to dollars 16 billion on some estimates. The new agency would

probably be the biggest in the US, with billings of around dollars 5.5

billion, though a full merger has been ruled out. In the UK a merged

agency would have combined billings of over pounds 500 million, nudging

at Zenith Media’s number one slot. But Jeff Fergus, the European group

president of Burnett, said there would be no UK merger, despite the fact

the two media agencies were close to a merger here last year. ’Starcom

is now established in its own right here,’ Fergus said. ’There are

advantages to having two brands, which would give us the opportunity to

manage issues such as conflict.’ Other sources insisted that a UK merger

had not been finally ruled out.



Mike Moore, chairman and chief executive of MediaVest Worldwide, said

talks would take place between the partners within the next two weeks

about how to progress on the media issue. ’I would speculate that there

will be complete mergers in some markets, partial mergers in others. We

would certainly hope to come together and be operating as a single

network, because that’s clearly where the advantages are. We were

desperately disappointed in the failure of our first attempts at a media

joint venture,’ Moore added.



Jack Klues, the chairman of Starcom Worldwide, is expected to take a key

role in a merged media operation. Moore, who was brought out of

retirement this summer, is unlikely to take a long-term post in a new

organisation.



Motive, the Bartle Bogle Hegarty media agency partly owned by Burnett,

is likely to tap into the new network but remain a separate brand.



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