After being rebuffed a year ago by Rainey Kelly Campbell Roalfe, Young & Rubicam reconnected with the British shop earlier this year, setting a meeting at a hotel suite in Cannes this June where the acquisition was set in motion.
The estimated $40 million deal bolsters Y&R's presence in London and aligns it with a creative hot shop while RKCR gains international reach and additional resources.
RKCR had been wooed by several suitors, but Y&R was the "only company we had any real meaningful discussions with," principal M.T. Rainey said. "They do believe in brands and are a very client-centered company."
Y&R will pay cash for RKCR--half up front and the rest over five years, provided the shop meets certain benchmarks. The deal combines Rainey Kelly Campbell Roalfe and Y&R's London office to create RKCR/Y&R, with billings of about $315 million and a staff of 215. The shop will be run by M.T. Rainey, Jim Kelly (as joint chief executives), and Robert Campbell and Mark Roalfe (co-creative directors).
RCKR resigned its $40 million General Motors Astra account to avoid a conflict with Y&R's Ford account. Tom Bell, COO of Y&R Inc., said a potential conflict between Y&R's international United Airlines account and RKCR's Virgin business has been averted. Y&R European headquarters in London will continue to handle United.
"We've had extensive discussions with United at the senior levels--they know what we're doing," he said. "I don't think we'll have a problem." Still, Mike Howe, director of advertising at United, said: "We're still assessing it."