Dentsu has sold the majority of its stake in Publicis Groupe, ending what was hoped to be a strategic alliance that would further the Japanese holding company’s expansion outside Asia.
In the current transaction, Dentsu sold back to Publicis 18 million of its shares, or 9.3 percent of outstanding stock, for $848.5 million. In 2010, Publicis began the buyback process by purchasing 3.8 percent of its shares from Dentsu for $286 million.
Dentsu initiated its investment in the Paris-based holding company when Publicis bought BCom3 in 2002, which owned D’Arcy, Leo Burnett, Starcom MediaVest and Bartle Bogle Hegarty. Dentsu had then owned 22 percent in BCom3.
The alliance ultimately had little benefit for Dentsu and, in fact, stipulated that Japan’s largest marketing communications company would consult with Publicis before initiating new joint ventures or other new investments in certain markets outside of Japan.
Dentsu now owns about 3.9 million shares in Publicis, or 2 percent of outstanding shares remaining after the French company said it would cancel 10.8 million shares of the 18 million newly-bought from Dentsu.
Despite the end of the partnership, the Tokyo company said there would be no changes to management or operations at the two joint venture companies created by Dentsu and Publicis, Beacon Communications and Dentsu Razorfish. However, Dentsu’s two executive representatives on the board of Publicis Groupe have resigned from those roles: The Japanese company’s chairman Tatsuyoshi Takashima and its president, CEO Tadashi Ishii.