NEW YORK (AdAge.com) -- The Interpublic Group of Cos. agreed to acquire True North Communications today in a deal valued at $2.1 billion. Interpublic will exchange 1.14 shares for each of True North's 51 million outstanding shares. The acquisition makes Interpublic the largest ad agency holding company in terms of billings and revenue.
Analysts Express Reservations About $2.1 Billion Deal
Inside the True North Acquisition With John Dooner
A Closer Look at The Numbers
True North was considered a likely takeover target following its loss in November of DaimlerChrysler Corp.'s consolidated $2.4 billion global Chrysler advertising account to Omnicom Group. The account represented about 9% of True North's revenue and as much as 25% of its profits. In 2000 the company reported revenues of approximately $1.5 billion.
Interpublic, which counts The Lowe Group and McCann-Erickson WorldGroup as its two global agency networks, gains a third in True North's FCB Worldwide. Also joining Interpublic's portfolio are smaller True North agencies Bozell Group and Temerlin McClain, both of which Interpublic said generated $2.6 billion in billings in 2000.
North American dependence
According to a company release announcing the deal, advertising and media revenues represented 59% of Interpublic's revenues in 2000. With the acquisition of True North, Interpublic predicts revenues to increase to 60%. In terms of geography, in 2000 Interpublic drew about 55% of its revenues from North America. With True North, domestic revenues will represent 59%.
With True North, Interpublic will have offices in more than 130 countries.
True North's chairman and CEO, David Bell, will be named vice chairman of Interpublic, and Brendan Ryan, CEO of FCB, will maintain his position.
Shares of Interpublic were trading this morning at $33.60 a share on the New York Stock Market, down $1.70 from Friday's close.