Lévy's Grand Plan for Publicis

Looking relaxed but a bit jet-lagged, Publicis Groupe S.A. CEO Maurice Lévy held court at the Peninsula Hotel last Thursday, sip-ping coffee and reflecting on an upbeat trip. Following the completion of its $1.9 billion acquisition of Saatchi & Saatchi Worldwide, Publicis is now listed on the New York Stock Exchange. In fact, Lévy got to ring the opening bell on Friday morning. And with the added revenue and billings of Saatchi, plus its 50 percent stake in Zenith Media Worldwide, ING Barings is calling Publicis' stock a "strong buy."But on Thursday, Lévy was busy fielding questions and telling the Publicis story to any reporter or analyst who'd listen.Yes, the French company that had a limited presence in the U.S. just a year ago now claims worldwide billings of $10 billion and a growing stable of agencies that includes Saatchi, Fallon, Publicis & Hal Riney, Burrell Communications and the former DeWitt Media. And no, Lévy is not done shopping, al-though he is now focused on specialized marketing-services companies to fortify his holdings."We will be on a buying spree. We will be [looking] to buy, [but] not agencies of the magnitude of Saatchi & Saatchi. We will reinforce the diversified and marketing-services agencies," Lévy said, adding, "We want to strengthen our position in specialized areas."In a wide-ranging interview that covered the new management structure at Saatchi, Fallon's global expansion, the planned herding of media operations in Publicis Groupe and speculation about the future ownership of True North Communications, Lévy, 58, is informed and personable, yet measured. Ticking off points, he can sound a bit like a politician, minus the histrionics and mudslinging.For example, he referred to French rival Havas Advertising as "my dear friend," even while boasting that Publicis had become the first French communications company listed on the exchange—a few weeks before Havas.Lévy's vision for Zenith and Optimedia, the media operation of Publicis, jibes with that of Saatchi CEO Kevin Roberts, who believes that it makes sense to combine the resources of both brands. Lévy suggests that it could be done under a separate holding company. While he wants Zenith and Optimedia to work together, he said they could do so without relinquishing their identities or individual management.Such a reorganization would need to be approved by Cordiant Communications Group, since CCG still owns half of Zenith. And although CCG CEO Michael Bungey has said that he's willing to take a smaller stake in something bigger, the size of that stake must be negotiated. Still, Lévy, who has had preliminary conversations with Bungey, is optimistic that such a deal can be struck."We have set up a process. And we will start by having a third party make an evaluation of the respective assets ... to see how much shares will go to each party," said Lévy. "What I have understood from Michael Bungey [is] that he wants to remain in the media business. And he wants to have a fair share in the new holding company. So I believe that all this will very much depend on how much is attributed to each one. If both of us think that the deal is fair, there is no reason why it can't be completed by the end of the year."Sources, however, said the negotiations had just begun and suggested that Lévy's timetable was unrealistic. "That's going to be a very hard, complex, difficult negotiation," one source noted. Bungey could not be reached.Lévy applauded Saatchi's recent plans to establish a "management partnership" for North America, noting that Publicis in Paris had adopted a similar structure that "worked very well." Saatchi's eight-person partnership takes effect Dec. 1, following the departure of CEO Jennifer Laing and vice chairman Tony Dalton [Adweek, Sept. 18].As for Fallon, Lévy acknowledged that the agency's planned expansion had been slow, due to its focus on servicing new megaclient Citibank and its desire to build—rather than acquire—agencies abroad. Fallon executives have traveled to Asia this summer and are in Singapore this week to explore the prospects of opening an office there, according to sources.When asked about True North and its recent talks with Omnicom Group [Adweek, Sept. 18], Lévy, still the single-largest shareholder of TN with a 10 percent stake, danced a bit. The talks have surfaced amid DaimlerChrysler's review of $1.5 billion in business now divided between TN's FCB and Omnicom's BBDO. Lévy would only say, "Our strategy is not to buy True North. It's not our strategy, if we are talking about our strategy today," adding, "I will put it that way because we don't know what the future will be." Then, as if to underscore his unwillingness to talk trash—even about a company that shunned his bid to acquire it in 1997—Lévy smiled and indicated that, naturally, he was rooting for FCB in the DaimlerChrysler review. Within minutes, Lévy says "Merci beaucoup" and is on his feet to greet another wave of reporters. It was Thursday afternoon, but there were still scores more with whom to share the story of the new Publicis Groupe S.A.

Brand Marketing

Lévy's Grand Plan for Publicis

Andrew McMains

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Andrew McMains