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LIAISON: Groupe FCA Talks to Agencies; Publicis/FCB a Candidate By Michael McCarthy and Jim Kir

Groupe FCA, the Paris-based parent company of the Bloom FCA agency network in the U.S., has held informal discussions

Industry sources on both sides of the Atlantic identified one of the suitors as FCA’s larger French rival, the $3.7-billion Publicis/FCB alliance. Sources said the discussions have concerned Publicis’ acquisition of FCA as an autonomous unit.
According to one insider, one of Publicis/FCB’s motives in talking with FCA is a desire to increase Publicis’ influence with L’Oreal, a client serviced by both agencies.
‘(Publicis chairman) Maurice (Levy) wants to increase their share of the (L’Oreal) business,’ said the source.
Levy could not be reached for comment. FCA president Philippe Calleux confirmed that the $600-million-plus international network has held discussions with several suitors, but he declined to discuss any details or confirm that Publicis was one of the suitors.
‘Yes, there have been discussions but one of our principles has been talk to everybody,’ he said. Asked if a sale was imminent, Calleux said, ‘One day it will be true, but it’s not true today.’
Calleux said that if and when a sale of FCA does take place the deal would probably resemble the one that TBWA Advertising struck with the Omnicom Group. ‘TBWA has not changed in terms of its image after the merger with Omnicom, but the equity has been solidified,’ note Calleux. ‘For potential advertisers that’s important. That factor could lead us to make the same decision.
‘We are not interested in merging with anybody,’ he added. ‘If this were to happen, it would be done to strengthen FCA as an independent advertising agency.’
An FCB spokesperson said that FCB and Publics have looked at a variety of options ‘to strengthen our alliance. But it would be premature to comment on any talks with any agencies at this times.’
A Publicis/FCA marriage makes sense on some levels. The two groups do share major multinational clients. In addition to L’Oreal, both work for Nestle.
However, it is not clear if a deal would focus primarily on Europe or if it would impact U.S. operations and involve Bloom FCA and Foote, Cone & Belding. Bob Bloom, chairman and ceo of Bloom FCA, is the only American executive with any stake in FCA.
Bloom, who sits on the Groupe FCA board, referred all queries to FCA.
Although there has been much speculation that Publicis/FCB is interested in creating a second agency network, a source inside said that was not necessarily the goal of these discussions.
‘The question is if this thing does materialize, how would it be positioned in the U.S.? None of it has been discussed. There would have to be a number of steps before it go to even the discussion stage,’ the source said.
The source added, ‘If a deal does happen, we don’t even know how it would be split. This seems to be more of a European-driven deal than a U.S.-driven deal.’
The discussions with FCA are unrelated to FCB’s recent acquisition talks with Portland, Ore.-based Borders, Perrin & Norrander.
The Japanese group Dai-Ichi Kikaku also holds a financial stake in Boom FCA, estimated at 28%. It also holds an estimated 10% stake in Groupe FCA.
According to industry sources in Europe, the impact of loi Sapin, the new law governing media sales and media compensation to agencies and independent buyers, may be driving FCA to explore the sales option.
Calleux, one of the most vocal opponents to the law in the French advertising community, said that the new law already has triggered the agency’s first layoffs and that it would have a negative impact on its financial results this year (Global News, Aug. 23).
‘Ten percent of agency personnel (industry-wide) have been made redundant by this,’ said Calleux. He said that FCA’s own cutbacks have been under 10%, because many of the agency’s clients have their own buying services.
Worldwide, the Group FCA network includes 14 offices in Europe and two in the U.S. under the Bloom FCA banner.
Copyright Adweek L.P. (1993)