NEW YORK Interpublic Group today confirmed that it is combining Deutsch with Lowe Worldwide, with the domestic-only Deutsch becoming the North American "hub" of the global agency network.
The agencies will share management and profit and loss responsibilities in what is in effect a merger of global and domestic shops. The combined operation will have an estimated annual revenue of $600 million and employ nearly 8,000 staffers at 74 offices, including Lowe affiliates, according to sources.
In announcing the move, however, IPG called the union an "alignment," in a nod to the generally negative connotations surrounding mergers, particularly those involving Lowe in the past.
Michael Wall and Tony Wright retain their global roles as CEO and chairman of Lowe, respectively, and Deutsch Inc. CEO Linda Sawyer becomes North American CEO, with oversight of U.S advertising operations, Lowe Roche in Toronto and Lowe Healthcare. In addition, Deutsch retains its name in the U.S., though the agency's business cards will now say, "Deutsch Inc., a Lowe & Partners Company."
The merger, which had been discussed by top executives of the shops and IPG for months, is designed to add ballast to Lowe's U.S. operation and give Deutsch the means to expand domestic client relationships to global markets.
"The respective strengths and needs of both companies are clearly complementary," said IPG worldwide CEO Michael Roth, in a statement. "By giving Deutsch the lead role in North America and access to a strong global network, while at the same time bolstering Lowe's standing in the vital U.S market, we believe we will create a more powerful offering and accelerate our growth."
In an interview with Adweek, Wright added that Deutsch is an "incredible brand and an incredible culture, so we want to use that." Sawyer, in turn, described Lowe as the "perfect complement" to Deutsch's domestic offering, adding, "Global is really the next big thing for us."
Current Lowe New York staffers will move to Deutsch's headquarters here, with Lowe N.Y. president Sal Taibi becoming general manager (and partner) at Deutsch. Deutsch New York president Val DiFebo will run the combined office with the new title of CEO.
The office's chief creative officer will not be current Deutsch CCO Peter Nicholson nor Lowe N.Y. CCO (and chairman) Mark Wnek. Rather, Deutsch has rehired Greg DiNoto, a former cd at the shop, to lead the combined creative department. As a result, DiNoto will close his eponymous New York shop.
Lowe has offered Wnek a global creative role with a focus on multinational clients, but it's unclear if he will take it. Wnek, who assumed his N.Y. leadership roles in 2005, could not immediately be reached.
Deutsch/LA in Marina del Rey, Calif., will retain its management team, though current co-presidents Mike Sheldon and Eric Hirshberg will now be co-CEOs.
Hirschberg is also CCO of the office, which is among four finalists for Volkswagen of American's U.S creative account.