WPP Buys Commarco, Parent of German Agency Scholz & Friends

Shop Has Joint Venture With Interpublic's Lowe to Unwind

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In the latest incarnation of Scholz & Friends, a major German agency that has been bought and sold multiple times and has a joint venture with Interpublic Group pf Cos., WPP is acquiring 100% of the shop's parent company, Commarco.

Lowe Deutschland, the German agency of Interpublic's Lowe & Partners, is a joint venture between Lowe and Scholz & Friends. The deal with WPP triggers a change of ownership clause that will likely lead to one partner buying the other out, or Interpublic could cancel the licensing agreement for the Lowe name.

"The Commarco deal has yet to pass regulatory approval," an Interpublic spokesman said. "As part of that process, we will be in discussions with our colleagues at Scholz & Friends over the future of our JV with them."

In a recent big win for Commarco, General Motors' German operation Opel in November 2010 named Scholz & Friends its creative partner, starting in January. The win includes adapting international work for the German market and handling European campaign development and creative management, according to a release on Opel's European website. And the agency hired Frank Bauer late last month to head the Scholz & Friends Opel Performance Centre in Hamburg and Frankfurt, which will be the lead agency for Opel's European brand communication. Mr. Bauer's title is international managing director.

Other WPP networks like Y&R, JWT and Ogilvy & Mather work for rival Ford Motor Co.

Scholz & Friends opened in Hamburg in 1981 and was a major independent agency when it was acquired by Cordiant, a now-defunct holding company that was once part of Saatchi & Saatchi. In 2003, private equity firm Cognetas bought Scholz & Friends from Cordiant and formed Scholz & Friends Holding. The holding company was re-named Commarco in 2008, and is majority owned by Cognetas.

The group claims to have almost doubled revenue between 2003 and 2011, from $99 million to $190 million. There are 25 agencies under the Commarco umbrella, including integrated agency Deepblue, relationship marketing group GKK DialogGroup, production company United Visions, and Lowe Deutschland.

Frank-Michael Schmidt, co-CEO of Commarco, said in a statement, "Following the successful Cognetas era, entering the WPP world opens the doors to the next level in our company's development."

Scholz & Friends' clients include Vodafone, Carlsberg and Unilever's Rexona, in addition to Opel. Other Commarco clients include Swatch, Burger King, American Express and Credit Suisse. The group employs more than 1,200 people.

Germany is WPP's third-largest market after the U.S. and the U.K. A WPP statement said that Germany is "showing signs of strength following the recession, as Central and Eastern Europe grow faster than Western Europe, particularly in Germany, Poland and Russia."

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