WPP Group's acquisition of US-based rival agency network Grey Global Group is going to have no impact on Grey's Indian operations, say senior Grey sources.
Highly placed advertising industry sources told agencyfaqs! that WPP will operate Grey as a separate network, in the same manner as WPP's existing networks - Ogilvy & Mather Worldwide, J. Walter Thompson Co., and Young & Rubicam - function at present.
As far as India is concerned, Nirvik Singh, chairman, South Asia, Grey Global Group (who oversees Indian operations) will continue to report directly to Edward Meyer, Grey's chairman-CEO, and not the WPP India chairman.
"As has been the protocol so far, all the India heads will continue to report to Nirvik Singh, and he, in turn, will continue to report to Edward Meyer. The various divisions of Grey India will continue to function as they have been. In a nutshell, business is going to be as usual. The only change is that now Grey is part of the WPP group," said agency executives.
In the race to acquire Grey, WPP outbid private-equity firm Hellman & Friedman, and French ad firm Havas. The WPP offer was a staggering $1.4 billion in a cash-cum-stock deal.
As far as Grey Global's management is concerned, Meyer, Grey's chairman and controlling shareholder, will continue to run Grey for a period of two years. In fact, Meyer has been offered a seat on its board by the WPP Group.
The acquisition, however, does not change international rankings of the advertising firms. WPP, the second largest holding company with revenue of $6.7 billion (2003), adds Grey, with a revenue of $1.3 billion, but the resulting $8 billion company will remain in second place in revenue behind Omnicom Group.
This acquisition showcases how WPP Group chief executive Martin Sorrell is building his advertising empire worldwide. The group already has acquired Young & Rubicam, Ogilvy & Mather and Cordiant Communications. Grey is the latest feather to adorn his crown.
With Diwan Arun Nanda, chairman, Rediffusion | DYR and Ajit Balakrishnan, co-founder, principal owner, and managing director of Rediffusion | DYR, likely to sell their stake to Y&R in phases, Rediffusion | DYR will eventually be Sorrell's sixth agency in India. The other five being Grey, JWT, O&M, Contract and Equus Red Cell.
Y&R currently has a minority stake of 20 per cent in Rediffusion, run by the two Indian partners (Nanda and Balakrishnan) who together own 60 per cent. Dentsu is the other minority shareholder with 20 per cent stake in the company.
© 2004 agencyfaqs!