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Omnicom buys Brazil’s Grupo ABC as it ramps up acquisition plans

Omnicom has signalled a more aggressive acquisition policy and kicked things off by buying Grupo ABC, reportedly the biggest independent agency in Brazil with some other offices scattered around the world.

Grupo ABC was founded in 2002 by Nizan Guanaes and Guga Valente, both of whom will stay on and has more than 2000 employees. Omnicom paid an estimated $270m for the company (capitalising on the weak state of the Brazilian real no doubt) which handles clients including Johnson & Johnson and Procter & Gamble. The agency will become part of Omnicom’s DDB worldwide. The Brazilian ad market is forecast to be worth over $18bn post the forthcoming Olympics.

angelastro-20140923031148211Omnicom CFO Phil Angelastro (left) said last month: “We’re going to continue to look for acquisitions that are the right fit, meet our strategic requirements, and we’re going to be aggressive in trying to find those assets that help us to grow the business, where we think it makes sense. We are in the process of negotiating some deals. The pipeline is strong at the moment.”

Omnicom has not been nearly as acquisitive in recent years as market leader WPP and French rival Publicis Groupe. It sought to remedy this two years ago by a mega-merger with Publicis but that rapidly unravelled over internal issues.

Although Omnicom’s organic growth has been strong recently it has been hammered by the strength of the US dollar against every other currency. It therefore makes sense for CEO John Wren and new FCO Angelastro to use that strength to buy agencies outside the US. Accordingly the company has formed a new dedicated acquisitions group although Wren has been careful to point out that people should not expect “big bang type things.” Presumably ruling out a move for either Publicis or US rival Interpublic.

France-based Havas is an outside bet, depending on whether or not owner Vincent Bollore sees it as a long term investment. Bollore is now chairman and the biggest shareholder in much larger French media group Vivendi.

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