The US, Spain, Italy, South East Asia and Latin America are among the target markets for acquisitions for the new-look AMO network, Havas CEO Yannick Bollore said today.
All 16 agencies in the AMO group – which includes four non-Havas 'partner' consultancies – will be able to add the suffix "AMO" after their names when the group is relaunched in September.
Five Havas-owned consultancies have commited to do this so far: Maitland, Havas Paris, Deekeling Arndt Advisors, Porda Havas and Abernathy MacGregor. The others can chose to do so at a later date.
A new central management team, headed by network co-chairmen Angus Maitland and James Abernathy - has been set up to oversee AMO. The executive working group will feature Maitland CEO Neil Bennett; Havas Worldwide president Stephane Fouks; Abernathy MacGregor CEO Tom Johnson; and Jose Antonio Llorente, president of AMO partner agency Llorente & Cuenca.
Charles Fleming, who joined Havas Paris in 2006, has been given the new role of chief marketing officer for AMO.
AMO was launched in 2001 and last year its agencies advised on almost 300 M&A deals worth around €240bn. Havas pointed out that between them, AMO agencies handled more M&A deals (292) by value in 2017 than any global network, including Brunswick, FTI Consulting, Finsbury/Hering Schuppener and Sard Verbinnen. AMO was fourth by deal value.
Speaking at a press briefing, Bollore said: "We were number one in terms of deal count, but the network was not really known. Havas will support the development of a real network, to shift from a collective to a club of agencies. In the next five years we will become the world leader, not only in deal count, but also in value."
Bennett said the aim is to move from a "passive referral" position – where agencies will recommend fellow AMO members if asked – to a "more active referral" approach, co-ordinated by Fleming.
He added: "As AMO, we act for about 25 per cent of the Fortune 500, but we act for them in different territories. One of the pieces of work that Charles is undertaking is to look at those and how we turn ‘in-country’ clients to global clients. That’s work that will take months and years."
Fouks said clients are increasingly looking for global networks in RFPs. "The logic is moving in that direction, and we want to go in this direction."
Bollore added: "It clearly shows what we want to build; the best local agencies with a global footprint."
He identified three options for the €100m investment promised for AMO over the next five years:
- Growing the existing agencies organically with new offices and hires, which he said is the "easiest" option
- Acquiring partner agencies - an "easy fit" from a "cultural standpoint" and "an option we are seriously looking at"
- Acquiring agencies outside AMO, which Havas has done in the past, such as through the acquisition of German agency Deekeling Arndt Advisers (DDA) earlier this year.
Regarding target markets for acquisitions, Bollore said the US is "a priority" as AMO looks to strengthen in the biggest financial regions.
In Europe, Spain and Italy are particularly attractive because AMO’s main presence in the continent currently is in the UK, France and Germany. He also highlighted South East Asia and Latin America as preferred locations.
Bennett stated: "I think it’s fair to say you can assume a significant majority of the €100m will be spent on acquisitions."
The move is not about synergies, Bennett suggested. "If anything, there’s going to be some additional costs with the creation of a central marketing unit, branding costs – it’s not huge."
Bennett also said he expects AMO agencies to increasingly benefit from each other’s particular strengths. For example, DDA has been advising other AMO consultancies on internal comms and change management.
Bollore said Havas was "committed to the long term" in the UK, despite Brexit. "I think the UK is a very important country for us. Today we don’t really see any impact [of Brexit] at all."
In a statement, Bollore said: "Our corporate and institutional clients are operating in an increasingly complex world, in the face of digital acceleration, fragmented media, disparate audiences and political uncertainty. To make sense of this complexity, they need clear and pertinent strategic counsel, founded on deep local knowledge and comprehensive global reach. The group’s investment plans will boost AMO’s growth and mark a new chapter in the network’s development."
Major recent M&A assignment handled by AMO agencies include T-Mobile’s merger with Sprint, Comcast’s intended bid for 21st Century Fox, and the Monsanto/Bayer merger.
Havas' PR business generated global revenue of around $220m in 2017, says PRWeek's Agency Business Report. In the UK, the combined value of the PR business - which includes Maitland, Havas SE Cake and One Green Bean - was around £35m last year, according to the Top 150 Consultancies table.