Dentsu, Young & Rubicam Partnerships is Asia's seventh largest agency network with billings of more than $1 billion last year. Y&R has a majority stake and operational control of DY&R's 22 offices in 13 Asian countries (excluding Japan, where Dentsu holds a majority).
WPP, meanwhile, holds a 20% stake in Japan's third-largest advertising agency, Asatsu-DK, the result of a 1998 investment. That partnership has expanded outside of Japan; in January, for example, Asatsu-DK and WPP-owned MindShare formed a joint venture media shop in Taiwan, Media Plus Communications.
A senior O&M executive in Asia/Pacific confided, "I don't think [WPP Chief Executive Martin] Sorrell realizes how big of an issue this acquisition presents in Asia. Asatsu is the mortal enemy of Dentsu."
"I would think this deal [between WPP and Y&R] means the end of Dentsu, Young & Rubicam," speculated an executive at MindShare in Hong Kong.
Dentsu is also an investor in B Com3, the holding company of Leo Group and MacManus Group.
Sir Martin is known to be keen on continuing Y&R's relationship with Dentsu.Corporate mammoth Dentsu is taking a wait-and-see approach.
"We have not yet discussed [the WPP merger] with Y&R," said Dentsu Managing Director Fumio Oshima. He said DY&R has a strong future "because we need the DY&R network and Y&R also needs DY&R.
"DY&R is an established brand in Asia. We don't want to change," said Mr. Oshima. "But in the long run, you never know what will happen."