WPP Will Merge Its Holdings Down Under With STW and Up Its Stake in the Company

Grey, JWT, MEC, Mindshare and others to be part of new entity

Continuing a year of expansion on many fronts, WPP Group plans to merge its holdings in Australia and New Zealand with longtime regional partner STW Communications and increase its stake in the company from about 25 percent to 61.5 percent.

The combined operation would generate annual revenue approaching $800 million and employ more than 5,000 people across 75 companies.

STW CEO Mike Connaghan told The Sydney Morning Herald, "Bringing the two together, to me, always made a lot of sense, it was just making sure we could get a sensible deal done. WPP was very keen to have its businesses involved in the transaction so it could get to a place where it has local management of all the assets of WPP and STW and that's my new job with the new company."

Most of WPP's best-known brands—including Grey, JWT, MEC, Mindshare and many others—would become part of the new entity, which Connaghan will lead.

In a statement, WPP said the merger continues its "strategy of investing in important geographic markets and to advance 'horizontality' to ensure our people work together for the benefit of clients."

The union is subject to the approval of STW shareholders and Australian regulators. After the deal goes through, STW will change its name to align with WPP.

Among the world's top ad players, WPP has been especially aggressive this year, picking some 40 companies in numerous sectors across various regions. For example, a month ago, WPP acquired independent Essence Digital Media. Shortly before that, WPP and Acquira, a digital experience firm, launched a global alliance to develop cloud-based solutions for clients.