"I am delighted," Publicis Chairman Maurice Levy said of the settlement covering the dissolution of their global partnership. "Publicis . . . will continue its worldwide expansion through a strong new global network that offers a fresh alternative for multinational advertisers."
Echoed True North Chairman-CEO Bruce Mason: "We got what we wanted. FCB will have complete control of its own global network, with strong representation in every region of the world."
Last week's deal addressed all issues left unresolved by a December agreement setting the groundwork for a gradual separation (AA, Feb. 10). Among the terms:
True North will give up its 49% stake in European joint venture Publicis FCB in exchange for a bigger stake in the Publicis holding company and total control of joint venture agencies in Athens, Lisbon, London and Paris. Publicis will keep a presence in those cities through separate agencies.
True North's Publicis stake will rise to 26.5% from 20.8%. Publicis will continue to own 20% of True North; each company will keep a seat on the other's board.
True North will merge the four shops from the joint venture with recently acquired Wilkens International to create FCB Europe, with billings topping $1 billion.
True North will sell Publicis its interest in agencies in Argentina, Australia, India, New Zealand, South Africa and Thailand for $14 million to $18 million.
Multinational clients will decide when and if to shift accounts between FCB and Publicis. Both sides expect clients to move business gradually. The two networks will enter into long-term agreements to serve each other's clients in countries where it isn't practical for both to have an agency.
"I think they have designed this deal beautifully," said Lauren Fine, an analyst at Merrill Lynch & Co. "I'm very encouraged that True North now has its own network. It's not going to be an overnight success, but it's something to grow with."
Wall Street responded positively, pushing up True North's stock 88 cents to $21 by Feb. 20.