Advertising giant WPP was celebrating another major acquisition today after agreeing terms to buy Procter & Gamble’s agency Grey Global.
The deal for the New York-based company – worth $1.31bn (€1bn) – brings on board the world’s seventh largest advertising company and a number of new blue-chip clients, who also include 3M and Warner Bros.
WPP beat off competition from smaller French rival Havas and a consortium of private equity groups to secure a winning place in the auction.
The move is the latest in a string of deals by chief executive Martin Sorrell, who last year acquired UK rival Cordiant Communications.
Sorrell said the addition would help broaden WPP’s relationship with a number of its leading clients, while bringing access to new business.
The boss of the world’s second largest advertising company added: “All of us at WPP are excited by the prospect.”
The prized client at Grey Global is consumer giant Procter & Gamble, which is the world’s largest advertiser and a client of Grey for more than 40 years.
Once the deal has been completed, Sir Martin will look to improve Grey’s operating margins, which stood well below those of WPP at 5.8% in 2003. He wants that figure to be 11.5% in 2006, compared with 15% at WPP.
Ed Meyer, the 77-year-old Grey Global chairman who owns around 20% of the company, will remain at the company until at least December 31 2006.