Bates' strategy for future growth is to go global as clients do the same, said board members of Cordiant Communications Group, the Bates holding company that will emerge Dec. 15 from the break up of Bates and Saatchi & Saatchi Worldwide.
Once it separates from Saatchi, Bates plans to increase revenues by owning more of its affiliates around the world (AA, Oct. 20), as well as to turn its below-the-line operations into global brands, according to CEO Michael Bungey.
Bates hopes to build its specialized communications operations -- direct marketer 141 Worldwide, interactive shop XM and medical agency Healthcom -- into global brands, either by starting up or acquiring additional offices, he said.
Part of that strategy is to develop global assignments as existing clients expand, turning regional clients into global ones, said Peter Schoening, chairman of Scholz & Friends Group, Munich.
For example, Bates now has a substantial office in China thanks to the expansion in that country of client British American Tobacco, said Alex Hamill, Bates' Asia Pacific regional director and chairman of George Patterson Bates, Sydney.
The company is developing plans over the next six months, spelling out where it may need to make acquisitions and what it's willing to spend for them, added Jean de Yturbe, chairman of Bates Europe.
INDIA DEAL CLOSE
Mr. Hamill said Bates is close to a deal to acquire a full-service agency in India and Mr. de Yturbe said the company is looking at acquisitions in Germany and in France.
Bates has been mentioned as a potential takeover target once the Cordiant breakup is completed, but executives said they have no intention of selling.
With management holding only 14% of the company's shares and no takeover defenses, Mr. Bungey said performance will have to guarantee independence as the agency builds up a global client roster.
"We recognize it's a long-term process, but we sure as hell plan to go into it,"