Omnicom’s BBDO takes a majority stake in Clemenger Group – 25% to remain local

Omnicom’s BBDO is increasing its stake in Clemenger from 46.67 percent to 73.67 percent, as part of a strategic push into the Asia-Pacific region. The agreement reached today will position Clemenger as a key player in Omnicom’s ambition to be the leading advertising and diversified marketing force in the Asia-Pacific region, building on its strength in Australasia where the Clemenger team has been highly successful for many years.

Robert Morgan (left), executive chairman of Clemenger said: “We believe this Proposal will be a win, win ­ strengthening the ties between the businesses will dramatically enhance our Group capabilities. We regard this move as a natural progression born of deep cultural respect and strong relationships at every level. The extremely strong affinity we share comes from knowing each other and successfully working together for many years. It is particularly gratifying to see the original architects of the relationship going back to 1973 ­ Bruce Crawford, now Chairman of Omnicom and Peter Clemenger ­ still linked to the Companies and both being involved in us taking this next step.”

Clemenger, an unlisted public company, has entered into a Share Implementation Agreement (SIA) with BBDO where BBDO proposes to acquire one Clemenger share for every two Clemenger shares on issue not held by BBDO. The offer is $6.43 cash per share.

Implementation of the Scheme requires the approval of both shareholders and the Federal Court. Shareholders will be asked to vote on the Scheme at a shareholders meeting to be held later in the year.

Morgan said the board believes it is compelling for employees and shareholders with the directors unanimously recommending acceptance.

John Wren, President and CEO of Omnicom said Clemenger has developed significant capabilities beyond general media advertising.

“The Group includes many of the marketing service capabilities included in Omnicom

worldwide. We plan to tap into Clemenger’s knowledge and expertise to help develop

our business in the Region,” he said. A key ingredient to this Proposal is that we would like 25 percent of the company to remain in local ownership. A large element of Clemenger’s enduring success has been employee equity participation. We believe perpetuation of employee ownership is fundamental to their success. Continued local ownership is imperative to maintain the great team of people which the Group employs. We are keen on sustaining momentum by adding additional support and access to capital,” said Wren.

Andrew Robertson (left, pictured by CB in Cannes this year), president and CEO of BBDO Worldwide, said this is all about setting both parties up for accelerated growth.

“For 37 years BBDO Worldwide has had an incredibly effective partnership with Clemenger BBDO and the Proximity agencies in particular. It has worked well for our global clients, and the work done by the very talented people in these agencies has helped strengthen our reputation, and solidify our position, as the world’s most awarded network,” he said.

“For as long as this partnership was supported by a minority ownership position, it was neither in the interests of BBDO Worldwide nor of Clemenger Group’s other shareholders to leverage the extraordinary companies and individual talents that make up the Group outside the borders of Australasia. Clemenger has built a world class portfolio of companies, across all disciplines, and led by extraordinary people. With this move it will be in everybody’s interest to leverage these companies and this talent dramatically across the broader Asia Pacific region, and elsewhere in the world,” Robertson said.