CHICAGO-Bruce Mason, True North Communications chief executive officer, frequently talks about the “architecture” of the holding company. Last week, he finally added the new agency wing he had been promising shareholders and began considering further additions.
In announcing the definitive agreement for TN to acquire Bozell, Jacobs, Kenyon & Eckhardt in a stock transaction valued at $440 million, Mason said, “This gives us a much stronger financial position than we’ve ever been in, and that enables us to be very, very aggressive in the area of acquisitions.”
The deal raises speculation that an expanded TN also may be interested in acquiring another global network, such as Bates Worldwide, which is being “de-merged” from Cordiant PLC. Mason, however, added that “nothing concrete is planned for now.”
The acquisition of BJK&E, which is subject to shareholder approval and regulatory oversight and is expected to close in the fourth quarter of this year, will create the sixth-largest global advertising communications company, boasting more than $11 billion in combined billings, $1.2 billion in projected revenues and 297 offices worldwide.
According to Mason, none of the TN and BJK&E operations will be merged, including their media buying arms and their respective global agency networks-Foote, Cone & Belding and Bozell Worldwide.
Under the new arrangement, BJK&E chief executive officer Chuck Peebler will double as president of the holding company and chief executive officer of True North Diversified Companies, which comprise all other operations separate from FCB Worldwide and Bozell Worldwide.
Mason also announced that Richard Braddock, the former Citicorp president who has been a TN outside director since 1994, will assume the post of nonexecutive chairman. He will run the newly formed board of directors, including oversight of the integration process.
Braddock’s role, according to one source at the holding company, is to ensure that TN’s interests are well served when it comes time to name a successor to Mason. “[Braddock] is the insurance policy,” said this source.
Mason and Peebler said the board has asked for, and agreed to, employment contracts that will keep both men at TN “for the foreseeable future.” Mason declined to be specific on a timetable, but sources said he will remain in his post no longer than 18 months in order to oversee the merger. He had been expected to retire by the end of 1999, when he turns 60.
Peebler could succeed Mason at that time, but only with the approval of the board, led by TN-loyalist Braddock.
The merger posed only one significant client conflict, but it was a big one. Since Bozell’s Southfield, Mich., office works for Chrysler Corp., FCB will resign the creative portion of the estimated $250 million Mazda Motor of America account.
Sources said Richard Beattie, a Ford Motor Co. executive, will probably conduct an agency review that will involve current Ford roster shops, J. Walter Thompson, Ogilvy & Mather, and Young & Rubicam, as well as outside contenders. Ford has management control of Mazda. FCB recently lost its national media buying assignment for Mazda to global Ford agency JWT.
Mason said that Chrysler executives endorsed the merger. Jim Holden, Chrysler executive vice president of sales and marketing, agreed. “We’ve had a lot of discussions about making sure that Bozell’s critical players, Leo Kelmenson, Michael Vogel and Kim Gaynor, will still be the primary drivers for Chrysler. And that’s absolutely the case,” Holden said.
-with Tanya Gazdik
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