When Maurice Levy announced a five-year, $4 billion acquisition plan last week, it felt like a big undertaking in what marks the final phase of his 40-year career at Publicis Groupe. But it was also a commentary on what the French ad giant's CEO is not doing: buying a rival holding company.
"A lot of people think as a last move I should acquire IPG," Mr. Levy said, referring to the Interpublic Group of Companies. "This is not something we are contemplating. ... Why should we go after a holding company and through a restructuring? I'm just trying build something rock-solid."
Something, he says, that can withstand some of the early mistakes "a successor will inevitably make" -- much like missteps that Mr. Levy acknowledges he made in the "80s after Marcel Bleustein-Blanchet passed him the torch.
Rumors of a Publicis-Interpublic tie-up resurfaced last year, and Interpublic CEO Michael Roth suggested one barrier to a deal was that nobody was putting a "very attractive offer" on the table. If Mr. Levy's guidance is gospel, Publicis won't be the one to do it.
After "dropping big checks for six to seven years now, what changed was the idea of focusing on smaller- and medium-size acquisitions," said BMO Capital Markets Analyst Dan Salmon of Publicis. Following a string of U.S. and European purchases, such as Digitas, LBi, Razorfish, Rosetta, and Rokkan, Publicis is focusing on BRIC countries and Mexico, Indonesia, Turkey and South Africa.
"These are the key targets and we are looking to do as many acquisitions there as we need to strengthen our current operations and become a clear leader," Mr. Levy said. Conquering new territories would be ideal; European economic woes have given Publicis a more-difficult-than-anticipated time on its home turf this year.
Achieving Publicis' stated plan to make digital and emerging markets account for 75% of revenue by 2018 won't be easy. To get there, it will look beyond what's traditionally -- or even currently -- considered appealing to a marketing company. "They're not going to go buy AppNexus, but they could invest in a little ad-tech firm and it would it be in line with the M&A strategy," said Mr. Salmon.
Publicis' newest acquisition in India, Neev, is less agency than software company, Mr. Levy pointed out. "We have moved from just communications to also being an IT provider; we have over 150 e-commerce clients," he said. "We are in areas that others have not touched yet."
So if it's not a megadeal, what will Mr. Levy's lasting imprint on Publicis be? "I'm not thinking about my legacy. If people say, "He was a nice guy and he did a good job,' that's what I'd want."~~
CONTRIBUTING: ALEXANDRA BRUELL