Following the acquisition of Cordiant Group (that owns Bates), UK, media conglomerate WPP is reportedly negotiating the merger of Enterprise Nexus with Bates India.
According to industry observers, the merged entity would be called Bates Enterprise. If the merger turns out to be a success, then Bates Enterprise would be WPP's fifth agency. JWT, O&M, Rediffusion DY&R and Grey Worldwide being the other four.
While the details of the merger are not available, with regard to the disinvestment process in Enterprise Nexus, Lowe is expected to sell its entire 40 per cent stake in Enterprise Nexus to WPP. And Mohammed Khan, chairman, Enterprise Nexus, who owns the remaining 60 per cent share, is expected to offload a certain stake that will make WPP the majority stakeholder in Enterprise Nexus.
When contacted, Khan said that he had proposed WPP take a controlling stake in Enterprise Nexus. However, when the issue of Bates and Enterprise Nexus merger was broached, he simply said, "I cannot say anything conclusive at the moment. But yes, there are very interesting possibilities on the table. And whatever we do, will be in the best interest of Enterprise Nexus and its clients."
Speculations about Bates and Enterprise Nexus merger began soon after Bates' acquisition by WPP last year. Ranjan Kapur, former executive chairman of O&M India, was made non-executive chairman of Bates in order to facilitate the merger with WPP. And in the midst of changes at Bates, Rajiv Agarwal, managing director and CEO Bates, quit. At the same time, Lowe and Mohammed Khan were on the lookout for suitors for a possible buy out of Enterprise Nexus.
To put things in perspective, Enterprise was born out of the partnership of Khan and Rajiv Agarwal in 1983. But in two years, Agarwal left the agency to launch his own ? Nexus. Arun Kale joined as a shareholder in Nexus.
Then in 1996, Khan, Agarwal and Kale came together to form Enterprise Nexus. To facilitate an international network affiliation, the three decided to give up their cumulative 40 per cent stake to Lowe. Later, Agarwal and Kale, gave up their shares to Khan, thus making Khan the majority shareholder in Enterprise Nexus.
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