Dentsu Spreading Its Wings
Acquisition of Aegis
Dentsu has acquired Aegis. Dentsu is a Japanese advertising company. Aegis is a media buying group from Britain. The acquisition of Aegis will facilitate Dentsu to have wider access to markets outside its home domain. The buyout will cost Dentsu $4.9 billion. It is one of the largest acquisitions in the advertising industry. Aegis is listed in the London Stock Exchange. There will not be any immediate management change in Aegis because of the acquisition. Aegis has specialised in buying media for its different clients. Dentsu creates both advertisements and also manages media for the advertisers.
Fifth Largest Entity in the World
After the acquisition, the combined entity will be the fifth largest entity in the advertising world in terms of revenue next to WPP, Omnicom, Publicis and Interpublic. Aegis is blessed with geographic diversification and has brands like Isobar, Carat, Posterscope, Vizeum and iProspect. Dentsu receives more than 80% of its revenue from its home domain Japan. It has a history of 111 years. After the acquisition of Aegis, Dentsu will receive 40% of its revenue from outside Japan as against the 16% currently it has. Recently US based Omnicom acquired Anil Ambani’s Mudra group. Omnicom is a $12.5 billion firm.
Acquisitions Galore In the Ad World
WPP’s JWT acquired 51% stake in Hungama Digital. Publicis’ Leo Burnett acquired the digital agency Indigo Consulting. WPP acquired the digital advertising firm in USA AKQA. Publicis bought Bartle Bogle Hegarty (BBH) network. In this context, Dentsu’s acquisition of Aegis is to thwart competition and to spread wings. Aegis is a $5.7 billion firm. As part of an expansion strategy, Dentsu Inc has bought out Mogae’s stake in its Indian arm. Sandeep Goyal is the group Chairman and CEO of Dentsu India. Indian advertising industry is witnessing many sell out of the local partners their tie-up with foreign advertisement players. After selling out his 26% stake to Dentsu, Sandeep Goyal has quit the group once for all and is foraying into digital world.
Dentsu is looking for adding to its client list FMCG brands. It has hopes of tapping the Japanese companies planning to enter India. Rohit Ohri is the Executive Chairman, Dentsu India and has spent a long time with JWT. After spending 21 years in JWT, why did Rohit Ohri quit the comfortable job and joined Dentsu India? No one knows the real reason for this but it should be a top secret known only for a few people in the industry.
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