Publicis buys Fallon to build new network

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Fallon McElligott, one of the last major independent shops in the U.S., is being snatched up by Publicis as the Paris-based company moves to create a new agency group specializing in Internet-oriented marketing. The sale price was estimated at $120 million by one person with knowledge of the deal. The agencies didn't disclose the sale price, but a Fallon spokeswoman said it was a "great deal" and would allow Fallon to expand overseas, beyond its year-old London office. Fallon will remain a separate brand under the holding company's umbrella, but Publicis President-CEO Maurice Levy said the Minneapolis-based agency will be at the heart of a new, second network "completely structured for the Internet Age."The new network is slated to roll out in 10 to 12 countries during the next three years. Publicis will spend $30 million to $50 million developing the network--to be especially focused on the Internet needs of major advertisers--principally through more acquisitions."This is a new kind of network for the 21st century," said Fallon McElligott Chairman Pat Fallon. "It's not about an outdated business model where more offices in more places or more people thrown at an account is better. This is a global network based on the marriage of branding and creativity and technology."Fallon, with more than $700 million in billings, has been courted in the past and was recently said to be shopping itself around more aggressively. The announcement was made simultaneously this morning in the New York, London and Minneapolis offices of the two agencies.

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Copyright February 2000, Crain Communications Inc.

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