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Comment - The split between Publicis and Dentsu

Keith Hunt, managing partner of Results International, shares his thoughts on the parting of the ways by Publicis Groupe and Dentsu.

“News that Publicis and Dentsu have terminated their strategic alliance slipped somewhat under the radar. That the tie up, which was originally announced with quite a fanfare, should quietly dissolve in such a way, is ironically, newsworthy in itself.

It represented a major investment by Dentsu but achieved little strategically for either party, although there were a few financial benefits. Dentsu benefitted financially in that it made a profit on its shares.

For Publicis it represented a convenient facilitator for the acquisition of BCom3. The Dentsu tie-up also enabled Publicis to secure a few joint ventures in Japan which is useful as the country is a notoriously difficult one for foreign businesses

The question now is what Dentsu will do with the cash resulting from the sale. It’s quite widely known that Dentsu has firm intentions to expand its presence in Europe following successful inroads made in the US. The latter has resulted in Dentsu acquiring a very classy independent agency called McGarry Bowen, a robust statement of intent. There have been several further deals since then and Europe is clearly earmarked for expansion now that Dentsu is no longer aligned with Publicis. The UK appears to be leading the way with Dentsu’s acquisitions of AdJug and of Steak Media.

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