After weeks of talks, British advertising giant WPP has today confirmed its takeover of US rival Young & Rubicam. The $4.7bn deal will create the world’s largest advertising group.
Chief executive of WPP, Martin Sorrell, said of the deal: “This transaction creates a new world leader. The two organisations are highly compatible. We share a common philosophy and culture of providing clients with integrated solutions to their marketing needs, and seek to add value to our clients and our people.”
Current WPP shareholders will own two-thirds of the merged group and Y&R shareholders can elect to receive either 0.835 new WPP American Depository Receipt’s or 4.175 WPP ordinary shares, valuing Y&R at $4.7bn, or £3bn.
Combined, the new group’s assets will top the ranks of every major geographical market. WPP’s operating companies include Ogilvy & Mather Worldwide, J Walter Thompson, Hill & Knowlton, and Mindshare; Y&R has agency networks around the world, including a major Asian division, DY&R.
Thomas D. Bell, Y&R’s president and chief executive, will become chairman of Y&R on completion of the deal, and Michael Dolan, current vice-chairman and chief financial officer will be appointed Chief Executive.
Protracted talks between the two groups saw WPP’s shares tumble (see Sharewatch). After a halt was called last week (see Sharewatch), talks were then resumed earlier this week and an announcement made this morning. The market has not responded well to the news so far however; latest share prices showed WPP down 8p at 845p.
