Paris-based Publicis Groupe says it has ended talks with Samsung about a potential investment in South Korea's biggest agency company, Cheil Worldwide.
Cheil started out as the in-house ad agency for Samsung and continues to do a significant amount of work for the Korean electronics giant. Samsung Electronics and engineering affiliate Samsung C&T still own over 25% of the agency.
Early this year, news reports said Publicis Groupe, owner of Saatchi & Saatchi and Leo Burnett, was considering a bid for a controlling stake in Seoul-based Cheil Worldwide, which is strong in Asia and also owns The Barbarian Group, Iris Worldwide and McKinney.
Publicis' statement said it "confirms having agreed with Samsung to end the discussions regarding a possible investment alongside the proposed collaboration with Cheil Worldwide." But Samsung remains a client for Publicis: "The strategic relationship with Samsung is as strong as ever and we will continue to work daily with Samsung and Cheil Worldwide to make the brand even more successful," the statement said.
Recent Korean news reports have suggested talks between Samsung and Publicis had broken down. It was not clear what caused the parties to step away.
Samsung had apparently been talking to several agencies about options for Cheil. The agency company said in a regulatory filing Monday that it had learned talks between a "key shareholder and global agencies on multiple avenues to cooperate broke off without any conclusion, and that key shareholder is not engaged in any talks for cooperation with other third parties at present."
Samsung has declined to specify what agencies it was talking to, and what kind of collaboration was being discussed. A spokesperson for Samsung C&T, which has the largest stake in Cheil at 12.64%, confirmed it had been in talks "with multiple global agencies for strategic collaboration," adding that there were no more discussions at this point.
Publicis is the world's No. 3 agency company, with revenues of over $10.6 billion in 2015, according to Ad Age's Data Center. Cheil, at No. 17, had revenues of $844 million last year.