As a result of the deal, True North's Foote, Cone & Belding Worldwide has resigned its estimated $240 million Mazda Motors of America business, a conflict with Bozell Worldwide client Chrysler Corp.
Bozell joins FCB as the second independent advertising agency in True North's stable. The merger will create a holding company with $11.5 billion in billings and a predicted $1.2 billion in annual revenue.
True North Chairman-CEO Bruce Mason will remain CEO of the holding company after the merger, while BJK&E CEO-President Charles Peebler becomes president of True North and chairman-CEO of True North Diversified Cos., the unit housing interactive shops TN Technologies and Bozell's Poppe Tyson. Those two interactive units "will operate independently at this point in time," said Mr. Mason.
Richard Braddock, a True North outside director and former president of Citicorp, will become non-executive chairman and True North's newly appointed Chief Financial Officer Donald Seeley will keep that post.
Bozell's Chief Financial Officer Val Zammit and True North's Associated Communications unit President Mitch Engel will take other, undisclosed, roles.
"It does legitimize [True North] as a holding company, and that's what Bruce Mason has been trying to do for some time," said Abe Jones, consultant at AdMedia Advisors. "Long term, it makes True North a viable holding company and it gives Bozell access to the capital markets, which is what they wanted."
The deal is expected to close in the fourth quarter, pending regulatory and shareholder approvals.
FCB has worked with Mazda since 1970. But FCB has been under the gun for several years because of Mazda's continued sluggish sales and Ford Motor Co.'s increasing involvement. FCB currently is in production on a fall campaign to relaunch Mazda's 626 sedan.
Though industry watchers have speculated Mazda will move to a Ford agency--most likely Ogilvy & Mather--one executive close to O&M said it was conceivable there could be a review.
Copyright July 1997, Crain Communications Inc.