The news last week of Publicis’s proposed takeover of Bcom3 has led to speculation about the future structure of the merged company, the possible clashes within it and whether the three companies involved – Publicis, Bcom3 and Dentsu – will “fit” culturally.
The deal will create a company with annual revenues of about $4bn (£2.8bn), meaning it would become the world’s fourth-largest agency group behind Omnicom Group, Interpublic and WPP Group.
Dentsu, which has revenues of $2.2bn (£1.55bn), has bought $500m (£353m) of Bcom3 stock to take a 15 per cent stake in the combined group; it currently holds a 21 per cent stake in Bcom3.
The deal gives Publicis chief executive Maurice Levy his first real crack at a marketing services outfit of global stature.
Observers and the agencies involved are warming to the deal, as it creates a truly global network and supposedly few client clashes.
The new company will create the advertising for five car companies. D’Arcy and Leo Burnett handle Fiat, Saatchi & Saatchi handles Toyota and Lexus, Publicis handles Renault, Bartle Bogle Hegarty (which is 49 per cent-owned by Bcom3) has Audi, and Fallon handles Volkswagen’s Skoda brand in the UK.
D’Arcy also works for Mars Confectionery, while Publicis works on NestlÃ©’s milk brands. These companies will have to decide if they see other agencies within the new group as being far removed enough from their own business to be able work happily alongside one another.
Insiders say cost savings could be made by merging agencies, with one senior agency source suggesting D’Arcy and Leo Burnett as the likely candidates for consolidation.
The acquisition will also result in one of the strongest media buying operations, comprising Starcom MediaVest and Zenith Optimedia. A likely development would be for Publicis/Bcom3 to adopt a similar strategy to Interpublic when it created a media division, Magna Global.
Magna Global, created last September, centralises Interpublic’s media agencies, Universal McCann, Initiative Media and CCIM, allowing clients to work with individual agencies or achieve economies of scale by working across the division.
Sources claim Dentsu considered buying Bcom3, but the 15 per cent stake it opted for means it continues to have a global presence, while leaving the running of the global network – of which it has no experience – to others.
The deal may have spread the new company neatly across the globe, but culturally there are likely to be problems. The 1998 strategic alliance between Publicis and Chicago-based Foote Cone & Belding soured five years later, and there are concerns that American/French cultural differences could surface in this case as well.
Optimedia chief executive Simon Lloyd says: “I can’t speak for Bcom3 but I can see big similarities between Publicis and Dentsu in the sense that they are both family-owned in essence, and everything is designed around long-term planning.”
The deal means Havas has been left in the cold. Publicis’s French rival, which is now fifth in the league tables, is likely to once more look at acquiring Grey Global, Cordiant Communications or Aegis to keep up with the pack.