LONDON (Brand Republic) - The Interpublic Group of Companies is understood to have clinched a deal to acquire True North Communications for $2.1bn (£1.46bn) in stock. A formal announcement is expected later this morning.
The boards of the two companies met yesterday to agree the deal. The sale of True North brings to an end a three-way battle to win control of the troubled group, which owns the FCB and Bozell Group advertising agency networks.
The deal values True North at $40.24 (£28.10) a share, which is just higher than its closing price on Friday of $39 (£27.23) a share.
WPP Group and Havas Advertising, as well as Interpublic, were all linked with True North in possible bids. Earlier on, Omnicom Group was linked to a possible deal.
The deal will see True North’s agencies join Interpublic’s powerhouse networks of McCann-Erickson WorldGroup and Lowe Group.
The acquisition is the first significant deal, and a real coup, for Interpublic chairman and CEO John Dooner since he took over the top job at the start of 2001.
It automatically propels Interpublic to the number one spot in world advertising, placing it ahead of WPP. It gives Interpublic combined revenues of around $7bn (£4.89bn) compared with WPP’s $6.6bn (£4.61bn).
True North has effectively been up for sale since November 2000, when its FCB agency lost the winner-takes-all pitch for the $1.5bn-billing DaimlerChrysler account to Omnicom’s BBDO Worldwide. The loss of the account was a severe blow to True North and it was followed by the departure of senior staff.
While the loss of DaimlerChrysler was a major blow to FCB, the agency still boasts a raft of blue-chip clients including Compaq, AT&T, Coors, Kraft, Nabisco and Quaker.
FCB has worldwide billings of $5.9bn (£4.12bn), while Bozell has worldwide billings of $2.3bn (£1.61bn). True North also owns marketing services network Marketingdrive Worldwide, PR firm BSMG Worldwide and Irving, Texas-based ad agency Termerlin McClain.