Principals vs. Parents At German Agencies: Changes at Holding Companies Have Led to Moves for Control By Rosemarie Totzaue

DUSSELDORF - Events on the international advertising scene involving agency holding compan

Upset with the developing scenario for Hildmann, Simon, Rempen & Schmitz/SMS when and if the sale of Scali, McCabe, Sloves to The Lowe Group is completed, agency co-founder, shareholder and managing director Thomas Rempen is planning to open an agency next year after quitting the WPP-owned shop. Meanwhile, Holtkamp, Mueller, Kentenich & May/Dusseldorf chief executive Jochen Holtkamp and his colleagues have bought a majority interest in the agency from parent company BDDP. That move was prompted by the French parent company’s decision to bolster its office in Frankfurt – to the point of shifting $20 million in billings from the Dusseldorf shop to BDDP’s Frankfurt office to defray the cost of starting up that office.
According to sources familiar with the negotiations between WPP Group PLC and Interpublic’s Lowe for the acquisition of SMS, Rempen had not wanted to be a part of the deal, and his reluctance has been called one of the many stumbling blocks in the lengthy negotiations. Rempen had been trying to reacquire the shares in HSR&S from WPP; however, the two sides could not come to terms on price. Rempen reportedly offered $3 million for a piece of the HSR&S pie, while Sorrell argued that it was worth closer to $12 million. Subsequently, WPP opted to place HSR&S in the Conquest Group agency family in Europe. Rejecting this arrangement, Rempen resigned.
‘Martin Sorrell is simply an accountant,’ Rempen said angrily about the matter. He said he plans to open up a new shop in early 1994.
‘This is a shock to us all,’ said Hans-Peter Esser, head of client services and media at HSR&S. With Rempen’s departure, only co-founder Gerd Simon is left from the agency’s inception in 1972. Anton Hildmann, current ceo of BBDO/Germany, sold his shares in the shop seven years ago. Creative guru Helmut Schmitz, who left the agency three years ago for health reasons, will divest his remaining shares by the end of the year.
To succeed Rempen, WPP has brought in Dominique Simonin, who was formerly managing director at J. Walter Thompson. Gerd Simon will take over his creative duties at the agency, which handles such clients as chemical and pharmaceutical manufacturer Hoechst, Merecedes-Benz’s parent Daimler-Benz and Siemens. With Conquest in charge, WPP sources said that there is some doubt that the agency will be able to keep their prestigious client roster intact.
With Rempen gone, HSR&S and other European agencies in the SMS network that aren’t sold to the principals or Frank Lowe will probably be merged with WPP’s Conquest.
Meanwhile, BDDP’s decision to bolster its office in Frankfurt has prompted another German agency principal to seek greater control over his own destiny. The French-based network shifted $20 million worth of international accounts, including Reckitt & Colman, Remy Martin, Hasbro toys, Hertz Rent-a-Car, and Tag Heuer watches from Dusseldorf to Frankfurt to defray the cost of financing the high costs of starting up the office.
Holtkamp and his colleagues have bought back 67% of the shares of HMK&M from BDDP. Layoffs are a likely possibility.
Rosemarie Totzauer covers advertising from Frankfurt.
Copyright Adweek L.P. (1993)