When Publicis bought Saatchi & Saatchi last year, it acquired Saatchi's 50% stake in Zenith. The other 50% is owned by Cordiant. Under the agreement announced today, NewCo will be owned 75% by Publicis and 25% by Cordiant. Publicis has an option to buy Cordiant's 25% stake for a minimum price of $105 million. Optimedia is Publicis' own media buying unit.
Advertising Age magazine previously reported that Publicis Chairman-CEO Maurice Levy has been negotiating an agreement for months with Cordiant CEO Michael Bungey.
According to a source close to the companies, the plan is to keep the two brands separate but create a jointly owned holding company that would be among the world's largest media specialist companies, an increasingly important factor in major global new business pitches.
Right now, Zenith and Optimedia rank ninth and 10th with billings of $4 billion and $3.6 billion, respectively, according to Advertising Age figures, but a joint holding company would be catapulted into the top five.
It is unclear who will be in charge of the new holding company. Zenith is run by Chairman John Perriss, and Simon Lloyd is Optimedia's chairman. -- Laurel Wentz
Copyright July 2001, Crain Communications Inc.