NEW YORK: Ketchum, seeking to expand its footprint in Europe, is absorbing Germany-based Pleon into its brand. The firms, which both operate under the Omnicom Group umbrella, expect the merger to be complete by January 1, 2010.
"In Europe, it will be very much a merger," said Ray Kotcher, CEO of Ketchum.
The combined agency will use the Ketchum brand globally, and will operate 103 wholly owned and affiliated offices in 66 countries with more than 2,000 employees. The agency will be rebranded Ketchum Pleon in Europe, with regional headquarters in Dusseldorf, Germany, where Pleon is headquartered now. Pleon operates 33 offices in 16 European countries, including Russia.
Prior to the merger, Ketchum had 23 wholly owned offices globally, all but five of which were in the US. The agency had 56 partially owned offices globally. In Europe, the agency had six fully owned offices, and five affiliates.
“When you put us together it is a very compelling client proposition. And in the end, that is what this is all about – the client proposition – and creating a consultancy that is far and away the most comprehensive consultancy,” Kotcher said. “Our clients were asking for this, and our clients want a global agency.”
He declined to discuss financial details of the deal.
Kotcher added that the firm will be in “a strong leadership position” in Germany, Spain, France, and the UK. About 40% of the agency's global revenues are expected to be European, he said.
Kotcher will retain leadership of the combined agency, while Pleon's CEO Timo Sieg will become the company's European CEO. The agency also appointed Ketchum's David Gallagher president of European operations, while retaining his role as senior partner of Europe, the Middle East, and Asia and CEO of the London office.
Jon Higgins, Ketchum senior partner for international operations, will also become agency CEO for international. Higgins will oversee the companies' integration along with Joachim Klewes, a Pleon senior partner, and will manage the firms' newly combined operations in Africa, Asia, Latin America, and the Middle East.
Ketchum reported global revenue of $200 to $300 million and US revenue in the $100 to $200 million range for 2008.
Kotcher and Sieg, who explained that they discussed a possible deal for about a year, said they do not expect layoffs to occur as a result of the deal. Asked about client conflicts, Kotcher said there were “very few places with an overlap.”
The merger also marks the end of the partnership between Pleon and fellow Omnicom agency Brodeur Partners, which combined to operate 76 offices in 47 countries, including 26 affiliate offices.
Brodeur will instead partner with independent London-based firm GBC Group, effective immediately, according to Andrea Coville, CEO of Brodeur. The agencies will specialize in technology, sustainability and clean tech, mobile telecommunications, healthcare, and consumer work.
Ketchum acquired San Francisco-based technology agency Access Communications last October.