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WPP's Sir Martin Sorrell predicts further industry consolidation citing Dentsu Aegis buying Interpublic Group and Havas consumed by Vivendi next


By Stephen Lepitak, -

May 9, 2014 | 3 min read

WPP CEO, Sir Martin Sorrell has speculated two further major marketing network consolidations could be set to take place following the collapse of the Publicis-Omnicom deal, claiming that Interpublic Group is likely to be acquired by Dentsu Aegis Network and that Havas will be consumed by Vivendi.

Speaking to The Drum, Sorrell said that the failure of the $35bn Publicis-Omnicom merger was "fairly easy to predict" although added it did happen faster than he had expected.

"It was strategically a U-turn by both companies, it was structurally clunky, it would have regulation issues in China where it still hadn't received approval before it died, and it would have had people and client issues. It never really satisfactorily explained the strategic rationale.

"It's a shame because we were taking business away to a significant extent, and taking people away to a four to one ratio, for every person who moved to Publicis/Omnicom, four moved the other way. Having said that, they still have to do a lot to get their act together. It's all very well arguing that they can be equally good separate but that then begs the question why they bothered in the first place. If it wasn't for self satisfaction, ego and emotional reasons, why did they decide to announce the deal 10 months ago?"

He admitted that having spent 10 months and many millions of dollars on attempting to make the deal happen, both Levy and Wren "looked a little bit silly" and added that the WPP strategy of buying small to medium sized business in digital and emerging markets would continue undeterred.

Asked what he felt the news meant for the independent agency sector, he stated his belief that more consolidation would take place: "If you look at the industry, consolidation continues in terms of clients and accounts. Consolidation will continue in terms of the agency. What is likely to happen is that Dentsu will buy IPG and Havas will become part of Vivendi. That's where I would place my bets at the moment."

Havas was acquired by Vivendi in 1998.

In a press conference about the collapse of the deal, Levy challenged Sorrell to list the clients and staff that WPP had won during talks of the merger, as claimed.

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