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WPP Acquires Top German Shop to Soften Brexit Blow

By Published on .

Armin Jochum, Karen Heumann, Michael Trautmann
Armin Jochum, Karen Heumann, Michael Trautmann
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WPP has bought one of Germany's top five independent agencies, Thjnk, whose clients include McDonald's, Ikea, Audi, Jack Link's and Germany's second biggest bank, Commerzbank.

Thjnk has sold 100% of the agency to WPP. There are 26 partners in the business, who all agreed the deal.

The move is positioned by the world's largest communications group as part of its strategic response to Brexit. As the U.K. prepares to leave the European Union, WPP is expanding its power base on the continent outside Britain (its home country), and securing access to global talent who may not be able – or willing – to work in the U.K. in future.

A statement from WPP said, "As a result of the U.K.'s referendum decision to leave the EU, WPP is placing an even greater emphasis on growth in Western Continental Europe, which includes four of the group's top 10 markets worldwide: Germany, France, Italy and Spain."

"We were seduced by the possibility to run the Thjnk brand independently and not be linked to another network. Martin Sorrell [CEO of WPP] said we could continue with what we were doing and make our dreams come true inside our own network," said Karen Heumann, co-founder and joint CEO of Thjnk. "I spoke to other WPP agencies in Germany and they said [Sorrell] was a good, solid partner. I didn't hear a moment of doubt about him."

WPP's German revenues were around $1.3 billion last year, making it the group's fourth largest market after North America, the U.K. and Greater China.

Thjnk set up a joint venture with Publicis Groupe's Leo Burnett in 2014, called Leo's Thjnk Tank, to work on the McDonald's business in Germany. A staff of 70 service the client, and last year the agency added McDonald's local restaurant business to its remit.

Insiders suggest that WPP will find a way around this conflict. Asked about what will happen to Leo's Thjnk Tank, Ms. Heumann said, "I don't know. We are working on that now. Of course we told McDonald's and they said that if nothing changes and there are new possibilities, then that's great."

Thjnk was founded in Hamburg in 2012 by Heumann with joint CEO Armin Jochum and Chairman Michael Trautmann. It now employs 400 people across offices in Berlin, Dusseldorf, Munich, New York, and Zurich.

"We are agency of the year in Germany this year. Everything is good but we have a need for speed. We need to horizontalize. I'm a planner and I like to have a big family of knowledge: data, studies, information," Heumann said. "Another universe is open to us. The inverse of independent – dependent – sounds awful. But independent can also mean being alone; it's not only positive."

WPP bought Scholz & Friends, another major German agency, in 2011, when it acquired its parent company, Commarco. That deal also had complications because of a joint venture with IPG's Lowe & Partners in the country.