Publicis Groupe has bought back nearly all the 11 per cent stake in the company held by Dentsu (some 18m shares) at a cost of €644m. This effectively brings to an end the alliance the two companies struck ten years ago although Dentsu still holds just over two per cent of the French marcoms giant and some joint ventures outside Europe will continue.
The move, long expected as the partnership has failed to develop as both parties hoped, leaves Elizabeth Badinter (pictured), daughter of Publicis founder Marcel Bleustein-Blanchet, as the biggest individual shareholder in Publicis Groupe with 10.99 per cent. It is also shrewdly timed from the French point of view with the euro trading at a low level due to the eurozone financial crisis.
Ten years ago the alliance between PG and Dentsu looked a good idea as PG was way behind Omnicom, WPP and Interpublic in the global marcoms stakes while Dentsu had found it impossible to expand out of its hugely profitable Japanese heartland (it controls over half the market there).
But PG has since prospered mightily, due in large part to its $2bn plus investment in digital agencies Digitas and Razorfish, while Dentsu has finally demonstrated that it could strike a good deal outside Japan with the acquisition of all-conquering Madison Avenue agency Mcgarrybowen.
Scrapping the partnership and also tidying up the shareholder register also ticks one of Publicis boss Maurice Levy’s biggest boxes as he continues his long wind-down towards retirement. PG is in a strong financial position (it found the €644m to end the deal from its own coffers) and now Levy can set off once again in pursuit of Omnicom and his old adversary Sir Martin Sorrell at WPP. He’s already overtaken Interpublic.