Bozell Added to TN ‘Architecture’: FCB to Resign Mazda; Mason Eyes Other Possible Acquisitions

Bruce Mason, True North Communications’ chief executive officer, frequently talks about the “architecture” of the holding company. Last week, he finally added the new wing he had been promising and began considering further additions.
Announcing the definitive agreement for TN to acquire Bozell, Jacobs, Kenyon & Eckhardt in a stock transaction valued at $440 million, Mason said, “This gives us a much stronger financial position than we’ve ever been in, and that enables us to be very, very aggressive in the area of acquisitions.”
That statement raises speculation that TN may be interested in acquiring yet another network, such as Bates Worldwide, which is being “de-merged” from Cordiant PLC. Mason added that “nothing concrete is planned for now.”
The acquisition of BJK&E, subject to shareholder approval and regulatory oversight, is expected to close in the fourth quarter of this year. It will create the sixth-largest global advertising communications company, boasting more than $11 billion in combined billings, $1.2 billion in projected revenues and 297 offices.
Mason said none of the TN and BJK&E operations will be merged. That includes their media buying arms and respective global agency networks–Foote, Cone & Belding and Bozell Worldwide.
“In terms of our day-to-day operations, very little changes,” said Temerlin McClain president Dennis McClain. “We wanted to maintain a situation where we’d continue to report to Chuck Peebler, and we will.” McClain loses the seat he held on the BJK&E board of directors.
Under the new structure, BJK&E chief executive officer Chuck Peebler will double as president of the holding company and chief executive officer of True North Diversified Companies, which comprises all other operations separate from FCB Worldwide and Bozell Worldwide.
Richard Braddock, the former Citicorp president who has been a TN outside director since 1994, will assume the post of nonexecutive chairman. He will run the newly constituted board of directors, as well as oversee the integration process.
Braddock’s role, according to a source at the holding company, is to ensure that TN’s interests are served when it comes time to name a successor to Mason. Braddock “is the insurance policy,” said the source.
Mason and Peebler have signed contracts that will keep them at TN “for the foreseeable future,” said Mason. He declined to be specific, but sources said he will remain in the post no longer than 18 months to manage the merger. Peebler could succeed him at that time, but only with approval of the Braddock-led board.
The merger posed one significant conflict. Since Bozell’s Southfield, Mich., office works for Chrysler Corp., FCB in Santa Ana, Calif., must resign the estimated $250 million Mazda Motor of America account.
Sources said Richard Beattie, a Ford Motor Co. executive, will likely conduct a review that will involve current Ford roster shops J. Walter Thompson, Ogilvy & Mather and Young & Rubicam, as well as other contenders. Ford has management control of Mazda.
The conflict issue was resolved last week when the agencies held meetings with both car companies.
“We’ve had a lot of discussions about making sure that Bozell’s critical players, Leo Kelmenson, Michael Vogel and Kim Gaynor, will still be the primary drivers for Chrysler. And that’s absolutely the case,” said Jim Holden, Chrysler’s executive vice president of sales and marketing.
FCB Santa Ana management has floated the idea of spinning itself off from TN to retain Mazda. Welton Mansfield, head of FCB there, declined comment.–with Michael McCarthy and Angela Dawson