Publicis set to buy Saatchi

Ad agency gains U.S. foothold

NEW YORK — As French companies seemingly continue on their path to world domination, giant advertising agency Publicis appears set to acquire rival powerhouse Saatchi & Saatchi for about $1.7 billion in stock, creating the world’s fifth-largest advertising group.

Speculation on a possible linkup grew throughout the day Monday as Publicis announced plans to hold a news conference today but didn’t say why, and London-based Saatchi & Saatchi revealed that it had been approached by an unnamed suitor but didn’t say who. The news sent Saatchi stock soaring by 20%.

Publicis CEO Maurice Levy will be the CEO of the combined company, sources say, in a fusion that will give Publicis something it badly needs, a major foothold in the U.S. — which accounts for about half of Saatchi’s business.

Piece of U.S.

Publicis has been trying for a piece of the huge U.S. market, attempting unsuccessfully to buy True North Communications several years ago. More recently it lost out on Young & Rubicam, which was acquired by WPP Group, a U.K. heavyweight.

The merger would represent the latest in a string of deals that have transformed the worldwide advertising business over the past few years, as advertisers have grown more international and their ad agencies wish to keep pace.

The deal would rep the second major international media takeover by a French company in a week: Conglom Vivendi is expected to announce today its purchase of Seagram Co., owner of Universal.

Over 90 countries

Saatchi has about 150 offices in more than 90 countries and serves clients such as Sony Corp., Procter & Gamble, Toyota, DuPont and General Mills. Its Web site claims it works with 68 of the world’s 100 biggest advertisers. Saatchi also provides worldwide marketing, communications and media services through Rowland Communications Worldwide, has a 70% interest in the Facilities Group and owns a 50% stake in Zenith Media Worldwide.

Saatchi was part of Cordiant until that company split into two separate advertising groups in 1997.

Publicis operates one of the largest advertising networks in Europe and was France’s first advertising firm. It has operations in more than 70 countries, offering advertising creation, marketing services, media buying and event marketing.

Its agencies include Publicis Conseil, FCA!BMZ and Publicis & Hal Riney in the U.S. The company also operates Publicis Dialog (direct marketing), Publicis.Net (interactive marketing) and Optimedia (media buying).

Elisabeth Badinter, chair of the firm’s supervisory board and daughter of the firm’s deceased founder, Marcel Bleustein-Blanchet, controls approximately 41% of the company.

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