Taylor Nelson Sofres and GfK have agreed a “merger of equals” to create the world’s second-biggest market research company with a market value of about £2bn. The move is a snub to WPP Group, which launched a £950m takeover proposal for TNS but was rejected within 24 hours.
The plan to merge the companies was revealed in April in a bid to take on market leader AC Nielsen.
WPP chief executive Martin Sorrell (pictured) said last month he was “surprised and disappointed” that the market research group rejected his proposal rather than “persisting on an exclusive basis” with GfK. The Nielsen Company, owned by a consortium of private equity groups including Kohlberg Kravis Roberts, was also understood to be considering a bid for TNS.
However, TNS has announced today that it will offer 11.74 new TNS shares for each GfK share. If GfK investors accept the offer, both sets of shareholders would owned 50% of the combined business, to be called GfK-TNS.
They say they expect annual pre-tax benefits from the merger to be at least £76m by the end of the third full year following completion of the deal, at a one-off cost of around £94m.
TNS, the world’s third-biggest market research company, and GfK, the world’s fifth largest, expect the deal to close during the last quarter of the year
One source has suggested the deal may yet fall foul of European Union competition authorities. He says EU authorities would “look dimly” on the number of research companies capable of competing for TV measurement contract dropping from three to two (MW May 1).