WPP and Young & Rubicam created the world’s largest advertising network this week after agreeing, in principal a $5.7 billion (£3.7 billion) takeover deal.
WPP is understood to have returned to the negotiating table after senior Y&R executives accepted WPP’s immediate control over the group in return for a higher share offer. A deal with Publicis, which had stepped in after Y&R’s first round of talks with WPP failed on the issue of who should control the agency for the first year, became increasingly unrealistic after Y&R’s lead client Ford threatened to review its business. The French agency handle Renault.
WPP/Y&R leapfrogs rival international ad networks, Omnicom and Interpublic the current first and second largest networks.
The deal brings together WPP’s MindShare media network and The Media Edge, owned by Y&R. It is not yet clear what relationship the two will have. Also brought under one roof are three of the world’s premier creative agencies, Young & Rubicam JWalter Thompson and Ogilvy & Mather, as well as public relations companies Burson-Marsteller, Hill & Knowlton and Cohn & Wolfe.
The merger is expected to be announced officially at the end of the week after the agreement of Ford, both group’s key international client is secured. WPP, chief Sir Martin Sorrell will take the role of chief executive in the combined group. It is not clear what position Tom Bell, Y&R’s chief executive will take. It is understood that Mike Dolan, Y&R’s finance director will lead the US agency.