Aegis' Sale to Dentsu Is Delayed Pending China's Approval

Deal Is Now Expected to Be Completed by Feb. 28, Companies Say

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Japanese ad giant Dentsu Inc.'s $4.9 billion acquisition of London-based Aegis Group has been delayed because the company is still waiting for clearance from China, where the Ministry of Commerce of the People's Republic of China has yet to be satisfied that the deal complies with its antitrust law.

When they announced the July 12, Dentsu and Aegis expected to complete the transaction in the fourth quarter of this year, aiming for Nov. 12. However, the two groups today put out a statement giving they expect to complete the deal no later than Feb. 28, 2013.

Clearance for the deal was required from competition commissions in about a dozen countries, including the U.K., the U.S., Russia and Germany, and China is the only one left to confirm. MOFCOM is in talks with Dentsu and Aegis.

Louise Evans, Aegis Group's director of communications and marketing, said in a statement, "We are pleased to announce these anti-trust clearances today and we continue to work constructively with MOFCOM. Both Aegis and Dentsu are confident the transaction will complete on or before 28 February 2013."

The delay may be at least in part because the Chinese Communist Party is holding its once-a-decade leadership transition this week in Beijing. It is an extremely sensitive time for China and many major decisions and announcements have been put on hold.

Dentsu still gets 86% of its revenue from Japan, the world's second-largest ad market. Dentsu is the fifth-largest agency group in the world, but is far enough behind No. 4 Interpublic Group of Cos. that the Aegis acquisition won't affect the ranking.

Dentsu, which made $848.5 million in February 2012 when Publicis Groupe bought back Dentsu's deal, has already committed $1 billion to the Aegis deal by buying 20% of Aegis shares, Ms. Evans confirmed.

Vincent Bollore, the French billionaire investor and Aegis Group's largest shareholder, will receive around $1.17 billion if the deal is completed.

Dentsu, whose financial year ends March 31, will report half-year earnings Nov. 8. Aegis Group will report third-quarter results Nov. 16. Until the deal is completed, the two companies will continue to report their financial results separately.

Aegis also announced that it has acquired Austrian agency IQ mobile. Nigel Morris, CEO of Aegis Media Americas and EMEA, said, "The acquisition of IQ mobile ... will be important in differentiating Aegis Media's digital service offering in that market. [It] will provide us with opportunities to increase Aegis Media's mobile business in Austria and across Central and Eastern Europe."

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