Is a Havas-Vivendi Tie-Up a Step Closer?

By Published on .

Yannick Bolloré
Yannick Bolloré Credit: Havas

The possibility of a merger between Havas and Vivendi looks a little closer after Havas CEO Yannick Bolloré's comments at the group's first quarter results presentation today.

The two French companies have one important factor in common: Vivendi Chairman Vincent Bolloré – Yannick's father – is also the biggest shareholder in Havas.

Yesterday, Reuters reported that Vivendi CEO Arnaud de Puyfontaine said a merger with Havas could "make sense."

Today, Yannick Bolloré did not protest too much when asked by an analyst about de Puyfontaine's comment.

"Of course we are pleased to hear great things about Havas from a great CEO such as Arnaud," Bolloré said, "but you know we don't really want to comment because there are no discussions taking place between the groups."

He then went on to point out three potential benefits of a tie-up with Vivendi.

"We are a cousin company with a common shareholder," Bolloré said. "And we are both in the communication industry … Content is important to agencies like Havas, and Vivendi of course is one of the best content producers and distributors."

His second and third points were about what Havas could do for French media and entertainment group Vivendi. "Data is important to companies like Vivendi, and Havas is expert in converting data into insight," he said. Finally, Bolloré pointed out, "Havas is a specialist in consumer science … We know better than anyone how consumer trends are evolving in the different geographies. We have huge knowledge and tools, so of course that's of big interest to a company in the culture industry."

Bolloré finished by claiming there was "Nothing more to say," although he did suggest the analyst call Vivendi and added, "If you hear anything new, let me know.

Vivendi's apparent interest is unlikely to be based on first-quarter figures: Havas managed organic growth, which excludes currency fluctuations and acquisitions, of just 0.1%. First quarter results were dragged down by a 5.1% fall in revenue in Asia Pacific and Africa, and negative numbers in some European countries, particularly Spain.

Revenue for the first quarter was $559 million, up from $545 million in the first quarter of 2016.

"It's a slow start, but it's not reflecting what will happen for the rest of the year," Bolloré reassured investors, saying he expects to see growth accelerating across the group globally as soon as the second quarter.

In its announcement about first-quarter earnings, the company said "We confirm our forecast of organic growth of +2% to +3% for full-year 2017."

Havas attributed underperformance in Asia Pacific and elsewhere to media budget cuts in China, Hong Kong and the United Arab Emirates. Earlier this month, Havas signed a strategic agreement with Chinese agency group GIMC, which it hopes will improve performance in the region. "This is the right strategy for China and we expect it to start bearing fruit very soon," Bolloré said.

Asked about Havas' recent U.K. freeze on all Google and YouTube advertising spend, Bolloré appeared to be satisfied that the internet giant was doing everything it could to improve its record of putting ads next to questionable or unsafe content online.

He said, "Internet advertising is at a very early stage, and of course there are some mistakes that happen … The decision was taken in the U.K. – there is no evidence in other geographies – to advise clients to pause investment to give [Google] time to correct the algorithm."

Google had responded, he said, by calling Havas clients to apologize, and "are now making their best efforts to stop it happening again."

The scandal proves the importance of the media agency, according to Bolloré. He said, "Six months ago people were asking whether Google would be working directly with clients. I think in this crazy story you have the answer. People like us are very much needed in the complex media buying environment."

Most Popular
In this article: