Dentsu pulls out of AKQA deal, Engine spends some of its new money on US digi agency Deep Focus

Japanese ad giant Dentsu has reportedly pulled out of its deal to buy big digital agency AKQA for $600m (no reason given, cold feet probably) while the UK’s Engine Group has spent the first tranche of the £62.5m New York-based venture firm HIG has invested in it by buying US digi agency Deep Focus for an ‘undisclosed sum.’

Why has Dentsu pulled out? Probably because the AKQA management, headed by founder Ajaz Ahmed, doesn’t want to be bought (even for a ridiculous price) and would much prefer an IPO to get rid of majority shareholder General Atlantic even if it means riding the waves of the stock market.

As for Engine it now has the money to try to prove that it can do better than all those other collections of marketing communications businesses. The template for this remains WPP which started out buying design companies but then changed its mind and bet the ranch on buying ad agencies JWT and O&M.

Will £62.5m (less what it paid for Deep Focus) give Engine the option the chance to pull off a life-changing deal?

The short answer is no, without further borrowings. But we’ll see.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.