NEW YORK Interpublic Group today confirmed that it would go forward with a merger of Foote Cone & Belding and Draft, and that FCB worldwide CEO Steve Blamer has agreed to leave the agency following a transition period.
The new entity will be called Draft FCB Group.
As expected, Howard Draft, CEO of Chicago-based Draft, will become CEO of the combined entity [Adweek, May 22].
Blamer, 50, joined FCB on June 16, 2005, after sitting out for six months to honor his contract with WPP Group's Grey, where he had been North American CEO.
IPG, which owns FCB and direct marketing shop Draft, has been considering bringing the two agencies together in some fashion for several months.
The move will combine two global networks that IPG believes will complement each other with a traditional client base (FCB) and a strong direct-marketing offering (Draft). Draft, however, is the smaller entity with 40 offices worldwide and 3,000 employees, compared to FCB's 190 offices and 6,000 staffers. Redundancies will likely be eliminated in the coming months. FCB worldwide creative director Jonathan Harries will become CCO of the new entity.
The merger is believed to be the first time a so-called "below-the-line" shop assumes control of a "traditional" agency of the size and reach of FCB.
The last time IPG merged two of its global entities was in July 2001, when it combined public relation firms Weber Shandwick and BSMG. Two years earlier, the holding company combined Lowe & Partners with Ammirati Puris Lintas to create Lowe Lintas & Partners, with a combined $11 billion in worldwide billings. Frank Lowe was chosen to lead the combined shop as chairman and CEO, and APL co-founder Martin Puris resigned.
IPG CEO Michael Roth sat down with Blamer earlier this week to discuss the latter's exit, sources said. The estimated cost of Blamer's departure just 15 days shy of one year is about $7 million, per sources.
"We carefully considered the potential of a combination and believe that the resulting organization will be highly responsive to the new realities that are transforming the consumer and media landscape," said Roth, in a statement. "There is still a great deal of work to be done by the full leadership teams of both companies to develop a comprehensive plan and definitive timeline for integration."
Integration teams are being formed with equal representation from both FCB and Draft to develop plans for combining areas such as geographic market alignment, professional capabilities (business development, creative services, research, strategic planning, media), human resources and communications, as well as finance and operations. These teams will report to a committee led by Draft president Laurence Boschetto and CD Harries. The committee's work is expected to take about 90 days.
IPG expects full implementation of the merger to be completed in six to 12 months.
Click here for an interview with Howard Draft