Publicis/FCB Completes Group FCA Acquisition: Deal Seen As International Move, Not Creation of Second U.S. Network

CHICAGO – Despite Publicis/FCB’s acquisition of Group FCA last wee’This was primarily a European-driven acquisition that strengthens the international network,’ an FCB spokesperson said last week. ‘This is not the launch of a second network here. FCA will remain autonomous.’The liason between the two French advertising giants, which had been expected for several weeks (ADWEEK, Sept. 13), likely will result in the merger of the $250 million Bloom operation in the U.S. with Publicis $90 million outpost in New York, according to sources on both sides of the Atlantic.’It seems reasonable that mergers will result in some places like the U.S. but I don’t want to commit to it,’ said Publicis/FCB chairman/ceo Maurice Levy. ‘If we conclude that it’s right to merge the two operations, then we’ll do it.’Levy added he will be meeting with FCA, Bloom and Publicis/N.Y. management over the next few weeks to iron out the details with decisions expected before the end of the year. Publicis officials also will be meeting with executives from Dai-Ichi Kikaku (which holds a 10% stake in Group FCA and a 20% share of Bloom FCA) to determine if they want to sell their stakes or become shareholders of Publicis S.A. Dai-Ichi’s decision is expected by Nov. 15.But the merger of Publicis and Bloom in the U.S. may be as far as it goes in the states. Insiders say FCB will continue to look for a larger agency network in the U.S. with more regional offices. The acquisition solidifies some of Publicis/FCB’s largest clients in Europe such as Henkel, Nestle and L’Oreal, and may eventually boost Publicis’ presence in the U.S.Whether or not Publicis is combined with another acquisition in the U.S. to launch the second network in the future remains to be seen. Right now, that seems the most logical progression.’All of that still has to be determined,’ said one Publicis/FCB source. ‘It’s not clear how a second network would be set up in the U.S. It’s very possible Publicis will be used in some way, but it still has to be worked out.’Levy said: ‘Through the alliance with Publicis, FCB has the first stone in the foundation of a second network, as does Publicis. That’s the beauty of the alliance.’FCB has been active on the acquisition front, thanks to six straight quarters of growth. The FCA deal follows an FCB acquisition in the U.S. of creative boutique Borders, Perrin & Norrander earlier this fall. Both have been done on an opportunity basis and weren’t necessarily in the planning stages for some time.’These things haven’t been part of the grand design,’ said one FCB source. ‘It’s a matter of seizing the opportunity at the right time.’That also may be how FCB will go about setting up a second network in the U.S. While internally, FCB chairman Bruce Mason has been pushing to get another agency network set up as quickly as possible, no real contenders seem to be on the horizon for now. But that doesn’t rule out the possibility that FCB could still have a deal worked out by the end of the year, observers say.While Levy declined to comment on how the deal will change the management structure in the U.S., sources said they expect Publicis/N.Y. to move into Bloom offices and Bloom management to run a combined U.S. operation.Bloom FCA chairman Bob Bloom said he does not expect any changes in Bloom’s current executive lineup. ‘I am currently running the U.S. operation and I see no changes in my role whatsoever,’ said Bloom, who added that he’s still looking for U.S. acquisitions with the backing of his French parent.With speculation swirling about the possible name of a combined Publicis/Bloom FCA operation in the U.S., Bloom noted that he would agree to have the Bloom name taken off the door to smooth the transition. ‘I would look at every option to see what is best for the agency but nothing has been discussed or resolved yet,’ he said. ‘I would subjugate a personal point of view to what’s best for the agency.’Copyright Adweek L.P. (1993)