Publicis and Bcom3 Agree To Merge.

Publicis Groupe SA, Bcom3 Group, Inc. and Dentsu Inc. announced an agreement among the three companies with two distinct and complementary aspects.

The merger of Publicis and Bcom3, creating the fourth largest communications group in the world.

A strategic, long-term partnership between Dentsu and Publicis, allowing Dentsu’s clients to benefit from the worldwide networks of Publicis and Publicis’s clients to have privileged access to Dentsu’s experience serving Japan, a geographically and strategically significant country.

These unique agreements respond in the most efficient way to the growing needs of advertisers by giving them access to the first truly global, multicultural offering with exceptional resources in creative advertising, marketing services, and media.

Under the merger agreement, Publicis Groupe SA will acquire 100% of the capital of Bcom3 for $3 billion in stock and equity-linked securities. Publicis headquarters will remain in Paris and will continue to be directed by a Conseil de Surveillance presided by Elisabeth Badinter and a Directoire presided by Maurice Lévy. Maurice Lévy will continue as Publicis’s chief executive officer, and Roger A. Haupt, currently Chairman and Chief Executive Officer of Bcom3, will become Publicis’s President and Chief Operating Officer and will join the Directoire.

The merger agreement has been approved by the Conseil de Surveillance of Publicis Groupe SA, and by the Board of Directors of Bcom3.

“This is a three-way alliance of global vision and complementary strengths that will deliver significant value to our clients,” said Maurice Lévy, Chairman and Chief Executive Officer of Publicis. “Bcom3 consists of some of the finest advertising and communications brands in the world, including Leo Burnett, D’Arcy Masius Benton & Bowles, Manning Selvage & Lee, Bartle Bogel Hegarty, and the Starcom MediaVest media franchise. It is a rare and extremely attractive enterprise, with a unique culture, unparalleled creative portfolio, blue chip client list, and solid financial performance. We are honored to welcome them to the Publicis family. In addition, our exciting new partnership with Dentsu gives our clients access to the second largest worldwide advertising market through the premier advertising company in Asia. Moreover we become an extremely well balanced company, with 49 percent of our revenues going forward generated from North America, 37 percent from Europe, and 14 percent from Japan and the rest of the world. We are also enhancing our share in non-traditional creative services.

“Our focus has always been to be the best partner for our clients,” Mr. Lévy continued. “Today that means providing companies with high quality, global campaigns tailored for local markets with economies of scale and a full range of marketing, research, and media services. We are delighted that in pursuing this focus we will become one of a handful of premier global communications firms.”

Through the merger with Bcom3, Publicis will significantly enhance its client resources on a worldwide scale and will join the top tier of global communications organizations. It will become the fourth largest communications company, with revenues of $4 billion, generated by 38,000 employees worldwide. After completion of this merger, the new Publicis will rank first in Europe and third in the U.S., and its partnership with Dentsu will greatly enhance its position in Japan and throughout Asia.

Bcom3 is the seventh largest communications group in the world. Based in Chicago, it does business in more than 90 countries through its renowned agencies including Leo Burnett, D’Arcy Masius Benton & Bowles, Manning Selvage & Lee, Bartle Bogel Hegarty, and the Starcom MediaVest Group, which serve leading advertisers including Philip Morris, McDonald’s, General Motors, Procter & Gamble and Diageo. Bcom3 is a privately held company, approximately 79 percent owned by its employees and approximately 21 percent owned by Dentsu, with which it has had a strategic alliance for the past two years.

” When we formed Bcom3 and partnered with Dentsu two years ago, we recognized the need for a multicultural approach toward building client brands around the world,” Roger Haupt said. “The merger and global alliance we are announcing today vastly enhances our ability to provide superior expertise and services through premier advertising agency brands and an extraordinary geographic base. We know firsthand the strengths of Dentsu. Moreover we know by reputation how Publicis respects individual agency cultures while capitalizing on synergies. We are looking forward to a partnership that broadens our client resources, benefits our employees, and rewards our shareholders.”

Strategic partnership with Dentsu

Following the merger of Publicis and Bcom3, the strategic agreement that existed between Bcom3 and Dentsu will be maintained and strengthened between Publicis and Dentsu to allow Dentsu’s clients to benefit from the worldwide networks of Publicis, while the new Publicis’s clients will benefit from Dentsu’s services in Japan. The companies expect to engage in joint development, notably in sports marketing where Dentsu leads the global marketplace.

Mr Yutaka Narita, President of Dentsu Inc., said, “Dentsu, Publicis, and Bcom3 have many things in common, perhaps the most important of which is a corporate philosophy from which each agency operates its business. The ‘client first’ principle is one of them. An approach to management that considers and cares for everyone involved, from employees, clients and shareholders to the media and other stakeholders, is another. We all endeavor to gain the respect of society. In addition, each of us has great respect for our roots and our founders, the spirit of whom has been cherished and carried on today. And as individual organizations, we have all successfully nurtured our own corporate culture and identity.

“While respecting the fact that each network’s brand sprang from and grew in three different geographic areas – Europe, America and Japan – we aim to provide the very best marketing communication services covering every domain in the world market by integrating the power of the three corporations. By doing so, we believe we can win the confidence of clients and establish the very best global network. This is our mutual dream and common goal. Lastly, we would like to mention that without the support of Madame Elisabeth Badinter, the daughter of the founder of Publicis, none of this would have come to see the light of day. Together with Maurice Lévy, Chairman-CEO of the Management Board, and Madame Elisabeth Badinter, we intend to build a strong partnership. At the start of this new alliance, the Dentsu Group reiterates its determination to make further efforts in meeting the needs of its clients,” Mr. Narita continued.

Autonomous management

Following its traditional management philosophy, Publicis will ensure that the networks and units are managed autonomously, respecting their personalities, clients and brand identities. The combined firm will operate under the Publicis name. Each agency currently in the Bcom3 portfolio will report directly to Mr. Haupt in his capacity as Chief Operating Officer.

So what’s up with Publicis Sanchez Levitan, Bromley Communications, Tapestry, Pangea, Lapiz? One big Hispanic shop?