Following the acquisition of BBH by Publicis this week, Keith Hunt, managing partner for Results International offer his viewpoint on what the latest acquisition deal means for the industry as a whole, and questions why largescale holding companies have failed to attract and develop creative talent as successfully as those in the independent sector.
It’s no surprise that the original founders of BBH have sold their remaining 51% stake in the agency. They may well be thinking of retiring or considering other challenges and now is as good a time as any to cash in their chips.
In any case, a deal involving the purchase of a significant proportion of shares – 49% of BBH shares were bought by Publicis in 2002 – has never been and will never be the end game. There is always a final denouement, and this is what we are seeing in the case of BBH. A long term scenario where the founders of a business retire with a significant shareholding is never good for anyone. They lose influence and relevance and the agency in question can become rudderless.
Now that Publicis has a 100% shareholding we have a win-win for both parties. BBH can draw on group support and its leaders can play a great role in network strategy.
When you look at this deal in the light of further announcements such as the WPP acquisition of AKQA and the rumoured sale of LBi to another network, it’s clear to see that the industry is in great shape. Acquisitions of this size demonstrate that the big networks have strong reserves to continue with their planned acquisition strategies, which in turn is built on confidence in their own trading and profitability. This is a sharp turnaround from just a couple of years ago when many of the groups were nervously biding their time. In these times of economic gloom and doom it’s great to see these positive trends and we should all take heart.
On a final note, many have questioned the ability of the major networks to nurture and attract world-class creative talent. Why haven’t we seen one such group create and grow its own start-up; an agency who could do battle with the best of the independents when it comes to creativity and innovation? Might it just be that an all consuming focus on quarterly reporting is too blame?
Further industry reaction to the acquisition of BBH, AKQA and others, especially what it means for the independent sector, can be found here.