WPP media clout rises to $47.2bn after Grey takeover

LONDON - WPP's acquisition of MediaCom will create the largest media operation of any holding company with $47.2bn in billings.

MediaCom's $13.5bn in global billings will mean that WPP leapfrogs the media operations of Publicis, which, according to 2003 Recma figures, boast $34.2bn in combined billings.

WPP said it would look at ways for MediaCom to work with Group M, its parent media company. Group M negotiates media deals on a group basis for MindShare and Mediaedge:cia in key markets such as the UK.

However, WPP indicates it will maintain the MediaCom brand. For the time being, Alexander Schmidt-Vogel, the worldwide chief executive of MediaCom, will continue to report to Ed Meyer, the Grey Global chairman, rather than Irwin Gottlieb, the chief executive of Group M.

MediaCom, which had more than £700m in group billings in 2003, is the eighth-largest global network and the UK's largest media agency. It is also powerful in the US and other European markets such as Germany, but is among the weakest of the global networks in Asia and Latin America.

The acquisition will bring increased power to WPP in the UK, where it will manage £1.4bn in client billings through MindShare, MEC and MediaCom. Stephen Allan, the group chief executive of MediaCom in the UK, said no decision had been taken on whether MediaCom would pool its media negotiations into Group M in the UK.

Client conflicts, such as between Unilever and Procter & Gamble, may be more of an issue on the media negotiation side than with creative agencies because the resources of rival clients would be pooled.

Allan said: "In the UK, the operating structure won't change. Our market position is different in other markets. Because we are the market leader we are looking at opportunities from a tremendous position of strength. We will only do things to the absolute benefit of our clients."

Omnicom sources suggest WPP's acquisition of MediaCom is likely to trigger a renewed interest from Omnicom in acquiring Aegis, the owner of Carat.

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