Publicis Communication, Paris, said it acquired 100% of San Francisco-based Hal Riney & Partners. Hal Riney becomes chairman of the renamed agency, Publicis-Hal Riney & Partners.
The deal comes five months after Publicis lost its bid to acquire a much larger U.S. agency group, Bozell, Jacobs, Kenyon & Eckhardt. Bozell instead merged with True North Communications.
Terms of the Riney deal were not disclosed.
For Publicis, the deal pairs its existing U.S. agency, Publicis/Bloom, New York, with gross income of $37.2 million last year (ranked No. 72 in the U.S. by Advertising Age) and capitalized billings of $352 million, with the larger Riney agency, which had estimated gross income of $84.2 million (ranked No. 36 in the U.S. by Ad Age) and estimated capitalized billings of $702 million.
"There's no question the agency business is consolidating internationally," said Mr. Riney, "and this deal will allow us to expand our opportunities globally." No office or staff consolidation will take place with the deal. The Riney agency will be managed autonomously by Mr. Riney, who has signed a three-year contract.
Both Mr. Riney and Publicis President Maurice Levy stressed that no client conflicts or geographic overlaps exist between Riney and Pub- licis. They downplayed potential conflicts with Riney's work for General Motors Corp.'s Saturn in the U.S. and Publicis' Renault account overseas, noting that Saturn has no plans to launch in Europe.
The agreement gives Mr. Levy what he called "critical mass" to "start playing an important role" in the U.S.--propelling Publicis into the ranks of the top 20 agencies in the U.S. with more than $1 billion in combined billings. Mr. Levy said other American agency deals are still being pursued.
Mr. Levy added that the purchase was funded internally by Publicis. He said informal talks were initiated by Publicis two years ago but picked up speed early this year and were virtually finalized by February.
Mr. Levy said that, during that time, the head of one major U.S. ad agency group learned of the negotiations and contacted Mr. Riney in an unsuccessful effort to preempt the Publicis bid. But, Mr. Levy said, "Hal Riney above all did not want to become just another acquisition by some huge, faceless group."
Copyright May 1998, Crain Communications Inc.