Publicis weighs bid for Samsung agency Cheil

Publicis Groupe wants to buy 30 per cent of Cheil Worldwide, the once in-house Samsung agency that still handles the bulk of the Korean electronics giant’s $5bn worldwide ad and communications business, according to reports. Samsung currently owns about 25 per cent.

Cheil has a current market value of $1.9bn so Publicis would, presumably, have to pay north of $600m for the stake. But that’s small beer for the French-owned marcoms outfit that, despite its travails following the collapsed merger with Omnicom, remains profitable. Organic growth may have dried up but $3.7bn acquisition Sapient, a tech firm that owns the Sapient Nitro agency, has brought in profits.

Publicis holds the bulk of Samsung’s media business through Starcom Mediavest and recently won the UK out of home account from Interpublic’s Rapport, despite having no specialist OOH agency of its own.

$600m is a lot of money to pay for a third share of one account (Cheil holds others but Samsung is clearly the main attraction). But Samsung seems to like the structure of an in-house agency (sort of) with others cherry picked for particular assignments. CHI & Partners handles TV work for Samsung TV’s in the UK. A decade or so ago WPP, which owns 49 per cent of CHI, set up one of its bespoke agencies for Samsung but the arrangement failed to hold and Samsung returned to Cheil. But WPP boss Sir Martin Sorrell would surely be interested in turning this supposedly floating stake in Cheil into an auction.

As for Publicis boss Maurice Levy, currently under fire from all sides for the Groupe’s flagging performance and also due to retire in 18 months, a Cheil deal would put Publicis on the front foot again.

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