MPG admits needs for scale but rules out acquisition

LONDON - Fernando Rodes Vila, chief executive of Media Planning Group, has admitted the Havas-owned media agency needs more global reach, but still continues to rule out making any acquisition to grow the agency.

MPG appeared to give up its acquisition plans last year, following its parent's failed attempt to buy the CIA-owning Tempus.

In an interview in the Wall Street Journal, Rodes Vila admitted that MPG's clients are more and more global and need a group that reflects that, but despite this he says that he is "not spending money on acquisitions" and argues that the agency does not need a major acquisition at the moment.

The agency is currently in 26 markets. However, its current size is said to weaken its position when negotiating ad rates, compared with the bigger networks, which can get better deals for their clients.

Rodes Vila refutes this suggestion, saying that skilled negotiators should be able to negotiate decent rates regardless of the size of the agency. "We're not buying steel, we're not buying coal," he said.

This will go some way to quashing speculation that Havas could buy Carat parent Aegis, which is the only independent media-buying network left after MPG lost out to WPP in the battle to acquire Tempus last year.

The only other possibility would be a tie-up with Grey Worldwide, which owns MediaCom.

Rodes Vila is understood to be looking to take the agency into 40 markets. It is already in the process of bolstering its presence in a number of markets with a new office in India and expansion in Eastern Europe.

Earlier this year, it strengthened its western Europe presence with the acquisition of Frankfurt-based independent media agency, Schmitter Media-Agentur.

It has also recently boosted its US business by combining MPG in New York with Havas ad agencies Euro RSCG and Arnold Worldwide, and it is also expanding into Eastern Europe.

MPG is the 10th-biggest media agency in the world with revenues of $224m (£142.5m) last year, but analysts believe that it is too small to compete effectively on a global scale.

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