IPG takeover of True North gives BSMG a whole new PR family tree

NEW YORK: Interpublic Group's acquisition of True North

Communications may have catapulted it to the top of the list of

communications holding companies, but the move still leaves IPG with a

bronze medal in PR.



By adding True North's PR businesses (BSMG and Tierney Communications)

to its own (Weber Shandwick Worldwide and Golin/Harris), IPG has brought

an extra dollars 166 million in PR revenue to the mix. This puts its

combined 2000 PR revenues at dollars 627 million, according to the press

release announcing the acquisition. But despite the injection, IPG still

lags behind rivals WPP and Omnicom, at numbers one and two respectively,

in terms of both PR interests and overall size.



James Dougherty, an analyst with Prudential Securities, said the deal

increases IPG's reliance on the US market as a revenue source and does

little to help it reach the ideal two-thirds marketing services,

one-third advertising equation. 'We were lukewarm on this deal,' he

said. 'It moves IPG away from its goal rather than toward it.' According

to Merrill Lynch, IPG will generate 60% of revenues from advertising

businesses.



Whether True North's PR firms will remain in the same unit as its sister

ad agencies, FCB and Bozell Worldwide, or be moved into IPG's existing

Allied Communications Group (ACG), in which WSW and Golin/Harris reside,

is unclear.



True North CEO David Bell told PRWeek: 'BSMG has a golden opportunity to

strengthen its momentum in public relations by using IPG's resources,'

adding that no decisions had been made on the firm's future place in the

overall structure.



But Larry Weber, WSW CEO, indicated it would be unlikely that BSMG will

remain within the True North structure. 'With deals like these, when do

things stay the same? Not very often.'



Other options include BSMG continuing to operate as part of the True

North diversified companies division, which is chaired by BSMG CEO

Harris Diamond.



Weber, however, is still aggressively looking to ratchet up ACG's PR

holdings and reiterated that he was aiming to hit the dollars 1 billion

revenue mark by the end of the year.



IPG's acquisition of True North was confirmed on March 19. True North

shareholders gained 1.14 shares in the new entity, which will have

revenues of dollars 7.2 billion. True North's minority stakeholder,

Publicis, issued a press release saying it was unhappy with the price,

although it won't affect the deal.



Both WPP and Havas had also been linked to a deal with True North, which

made public its intention to sell after the recent devastating loss of

its biggest client DaimlerChrysler in November of last year.



IPG'S BIG THREE



WSW



Larry Weber



CEO



World's largest PR firm. Officially formed in January 2001 through

merger of sister IPG companies Weber Public Relations and Shandwick

Worldwide, announced September 2000



1999 Revenue: dollars 230 million*



Key clients: Kodak, Hewlett-Packard, Coca-Cola, General Electric, KPMG,

Microsoft, Pfizer, Siemens, Unilever



BSMG



Harris Diamond



CEO



BSMG joined True North in 1998 when it was acquired alongside sister ad

agency Bozell Worldwide



1999 Revenue: dollars 122 million*



Key clients: Allied Domecq, American Airlines, Center for Biotech

Information, Bristol-Myers Squibb, Kraft Foods, Wrigley, International

Dairy Foods Association



GOLIN/HARRIS



Richard Jernstedt



CEO



Given a new lease on life in IPG's Weber/Shandwick merger. Absorbed a

number of Weber agencies to double its size, then acquired The MWW Group

in October 2000



1999 Revenue: dollars 55 million*



Key clients: Loews, Nintendo of America, DaimlerChrysler, McDonald's,

Green Giant, Sprint, Amazon



*according to most recent PRWeek figures. Weber Shandwick Worldwide

total is approximate sum of 1999 revenue from Weber Public Relations and

Shandwick Worldwide.



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