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Dentsu India acquires majority stake in Webchutney

By afaqs! news bureau , afaqs!, New Delhi | In Advertising | May 23, 2013
The agency will continue to operate independently under the management control of its current leadership and will become a wholly-owned subsidiary of Dentsu India by 2017.

The Dentsu India Group has acquired 80 per cent stake in Webchutney, one of India's leading digital agencies. With this deal, Dentsu has bought Capital18's stake in the agency. Capital18 was a majority shareholder in Webchutney and as per the company, the investment has now generated a return of over 300 per cent. Though it could not be confirmed, the deal size is estimated at Rs 40-50 crore.

Dentsu

Webchutney logo

(L to R) Sidharth Rao, Rohit Ohri, Sudesh Samaria

The agency will continue to operate independently under the management control of its current leadership and will become a wholly owned subsidiary of Dentsu India by 2017. This happens to be Dentsu's first acquisition in the digital agency space in India. According to Dentsu, the acquisition process was going on for the last six months.

Founded by Sidharth Rao and Sudesh Samaria in 1999, Webchutney currently employs about 200 people across offices in Delhi, Mumbai and Bengaluru. While the digital agency's Delhi team will stay put in its current office, the Bengaluru team has moved into Dentsu Communication's office. In Mumbai, a representative of Webchutney will sit in the agency's new office at Goregaon (E) (which was inaugurated today).

Webchutney has been credited with developing award winning digital campaigns for some of the biggest brands in the country, including Airtel, Unilever, MasterCard, Coca-Cola, Bacardi Martini, Budweiser, ITC, Marico, Madura Garments, Titan, Bajaj, Reliance Retail and Saint Gobain. Network18 Media and Investments' venture capital arm, Capital18 had invested in Webchutney in 2007.

Speaking about the deal, Sidharth Rao, chief executive officer and co-founder, Webchutney, says, "We are thrilled to be working with such a strong global leadership and are ready to enter a new phase of our growth. I am also personally grateful to Sarbvir Singh (MD, Capital18) who has been my mentor for the last five years and his web team at Capital18 for ensuring that we shared a wonderful journey together."

Sudesh Samaria, national creative director and co-founder, Webchutney, says, "The Dentsu network is 'future obsessed' and that fits in perfectly with what we do here at Webchutney. We're always trying to be ahead of the curve and we love people, ideas and technology that will help us and our clients get there faster."

Reiterating that the partnership strengthens Dentsu India Group's digital offerings and expands its footprint in the space, Rohit Ohri, executive chairman, Dentsu India Group, states, "Dentsu is the first global network that's being built out in the post-digital era. We believe we're building the network of the future. Our partnership with Webchutney is another step in that direction." Considering Dentsu already has a digital arm, Ohri says there could be some level of synergy in terms of creative and content backend between Dentsu Digital and Webchutney. "Webchutney had certain limitations in terms of resources and know-how, which we are going to bring to it," he says. With this acquisition, Dentsu Aegis Network has 1000 people in its digital fold, the largest digital group in the country, Ohri says.

Dentsu, headquartered in Tokyo, commenced its India operations in October 2003 in a joint venture with the Mogae Group. In 2011, the parent company acquired the India businesses and the new Dentsu India Group became a 100 per cent subsidiary of Dentsu Inc.

The Dentsu India Group comprises three independent, full-service advertising agencies that include Dentsu Communications, Dentsu Marcom and Dentsu Creative Impact; a media arm - Dentsu Media, Dentsu Digital - a digital agency and Taproot India - its creative boutique. Besides the core advertising and media business, the group also houses world-class expertise in the areas of design, digital media and sports.

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