McCann's Michael Sennott Takes a Top Post; Judge Becomes Prez
NEW YORK--The marriage of Ammirati Puris Lintas and Lowe & Partners became official Friday as parent company IPG announced the formation of a new $11 billion agency called Lowe Lintas & Partners.
Frank Lowe will run the merged agency as chairman and CEO. Lowe said the merger achieves his objective "to build a top 10 worldwide agency with high creative standards." Lowe Lintas & Partners moves into the top five networks.
At the same time, the IPG board "regretfully" accepted the resignation of Martin Puris, the 60-year-old co-founder of Ammirati & Puris, which merged with Lintas Worldwide in 1994. The APL CEO said "one merger in a lifetime is enough." With his name being erased from the agency landscape, Puris is expected to start an Internet company.
As staffers digest the news, officials are busy sorting through more than a few client conflicts (see chart below) which will likely result in the departure of some accounts. Most notably, APL handles Toyota in some European markets, while Lowe in London has General Motors.
IPG boss Phil Geier, who got the go ahead from his board last Tuesday to proceed with the merger, said it "will combine the professionalism of APL and its global clients with the creative strength of Lowe, providing a strong worldwide resource that will directly benefit our clients."
Others noted that the deal extends Lowe's limited global reach, which had kept it from attracting more global clients. APL, meanwhile, has had more misses than hits in recent years and will now get new management.
At the new agency, Michael Sennott, a longtime McCann executive, becomes Lowe's No. 2, taking on the post of deputy chairman. Colleagues described Sennott, most recently vice chairman of McCann's WorldGroup, as charming, sophisticated, elegant and well-traveled. Sennott, 58, is a longtime ally of John Dooner, 50, who runs McCann and is widely viewed as Geier's successor. (Sennott and Dooner were once co-directors of the New York office and are good friends.)
"Michael is a clear-cut visionary," says Mitch Kanner, former director of commercial marketing at Digital Domain. "What he's forgotten most people are just learning. In terms of the model of the future, of what the new agencies will be, he's been going down this road for some time."
Three other Lowe executives will play similar roles in the new enlarged agency: Jerry Judge as president; Adrian Holmes as chief creative officer; and Lee Garfinkel as U.S. chairman and chief creative. Gary Goldsmith, vice chairman and executive creative director, also keeps his title, sources said. The sole APL name among global posts: CFO Vincent Lubrano.
The fact that APL executives were passed over for top jobs is an irony not lost on many observers. When the smaller Ammirati & Puris merged with Lintas Worldwide it was the APL executives who captured the prized posts, while Lintas officials were either dismissed or subordinated. In addition, the Ammirati & Puris name in that case took top billing.
That reality was reflected last week in the contrasting moods at the two agencies. Lowe staffers were cautiously optimistic, while APL executives vented bitterly about being left out of the loop. Some pointed fingers at APL boss Martin Puris, who did not attend the Tuesday board meeting. "I think (APL staffers) all feel betrayed by Martin," a source said.
IPG, meanwhile, may not be without a third agency network for long. The holding company remains in talks to buy The MacManus Group, which owns D'Arcy Masius Benton & Bowles, N.W. Ayer & Partners and MediaVest Worldwide.
If executed, the deal would place longtime rivals Procter & Gamble and Unilever under one holding company roof. P&G's looser conflict policy makes it possible, and since D'Arcy didn't handle any P&G detergents, Unilever appears amenable, too.
Said Denis Beausejour, P&G's vp of worldwide advertising: "As long as MacManus or D'Arcy (or other MacManus shops) don't handle Unilever business, we're fine with that."
The merger, which was partly designed to please Wall Street, came the same week IPG announced double-digit net revenue growth in the third quarter and the first nine months of the year. In fact, IPG CFO Gene Beard even took time out of an analyst's call on Wednesday to explain the strategic thinking behind mergers and acquisitions.
Without an agency network in the top 5, Beard said, "It's going to be very difficult to compete" on a global stage. IPG's stock closed Friday at $40.62, a modest gain.
Observers noted the high failure rate of mergers and wondered whether the grafting of APL and Lowe would take. "This is the way to quickly boost the revenue for both agencies," a source said. "I just think you end up bigger. I'm not sure you're better."
Or, as another source put it, "I think 50/50 is generous [as to] whether it's going to flourish."
--with Richard Linnett
CONFLICTING ACCOUNTS?
The global merger of Lowe & Partners and Ammirati Puris Lintas has raised questions about conflicts, among them:
Lowe APL
Heineken USA Labatt, Rolling Rock, Dos Equis
Henkel Unilever
American Home Products Johnson & Johnson
General Motors Toyota
Denny's Burger King
Sun Microsystems Dell
KPMG PricewaterhouseCoopers