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European Media Giants Consolidate

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NEW YORK -- Publicis Groupe and Cordiant Communications Group have formed a London-based media holding company, which will house their two media networks, Optimedia and Zenith Media. Meanwhile, French holding company Havas, owner of Media Planning Group, is purchasing England's Tempus, owner of CIA Medianetwork,for $630 million, creating a consolidated global entity that will be called CIA Media Planning.

The Publicis/Cordiant deal was expected, as the two holding companies have been negotiating ownership percentages for more than six months. In 2000, Publicis acquired half-ownership of Zenith when it purchased Saatchi & Saatchi. Optimedia is Publicis' global media brand. Under the terms of the agreement, the new entity will be owned 75 percent by Paris-based Publicis and 25 percent by London-based Cordiant. The sale price was undisclosed.

Optimedia and Zenith are expected to remain separate entities under the new structure. Final name, organization and executive details of the new holding company will be determined between now and September, when the deal is to be approved. In the U.S., Zenith commands an estimated $4 billion in billings, while Optimedia handles about $450 million.

Tempus, meanwhile, had been courted by at least three holding companies, in part to avoid a hostile takeover by WPP Group, which owns 22 percent of Tempus, according to sources. In the U.S., CIA commands about $650 million in billings, while Media Planning, in the process of absorbing the media operations of all Havas agencies in this country, claims total billings of $3 billion.

The European reshuffling comes just a week after IPG announced the formation of the world's first global negotiating company, Magna Global, and signaled a new round of consolidation among the world's largest media specialists.