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(May 23, 2001) PARIS -- Havas Advertising will soon merge two leading shops of its Diversified Agencies division -- Paris-based new technologies specialist Le Nouvel Eldorado and creative hot shop Enjoy Scher Lafarge -- into a new entity to be known as Enjoy, Paris.

The merger will create a new mid-size French advertising agency underneath the Havas umbrella, with 85 employees and gross income topping $10 million.

Neither officials at Havas nor those at the two agencies concerned were willing to explain the rationale behind the merger, which comes at a difficult time for Le Nouvel Eldorado. The agency, formed in 1996, recently lost anchor client French Internet service provider LibertySurf, while its new technologies division -- @n-@off, Paris -- has reportedly suffered financially from the ongoing slowdown in dot-com advertising.

Executives at Le Nouvel Eldorado look back longingly at 2000, when gross income grew by nearly 60%, to about $7 million, principally on the strength of new business from old-economy advertisers including household goods and electronics retailer Darty and up-market city center retailer Le Printemps.

Enjoy Scher Lafarge, for its part, has the most to gain from incorporation into a larger structure. While the agency has long been seen as one of Havas' most-respected creative outfits -- it won rave reviews and numerous awards in 2000 for a series of humorous ads for the Visual network of opticians -- its relatively small size has prevented it from attracting business from larger advertisers.

This question of size was posed in 2000 when it briefly held, and then lost, a portion of the Citroen advertising budget managed by Havas sibling Euro RSCG Works, Paris.

Sources say that the new Enjoy will soon take up residence in Le Nouvel Eldorado's existing offices. The agency will likely be co-managed by Enjoy Scher Lafarge's president, Christophe Lafarge, and Dominique Julien, co-founder and president of Le Nouvel Eldorado, with Gilbert Scher heading creative operations for the merged entity. -- Lawrence J. Speer

Copyright May 2001, Crain Communications Inc.

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