Submitted by Fox First at Ten on July 12th
NEW YORK (AP) - Dentsu Inc. of Japan said Thursday it will buy U.K. advertising agency Aegis Group PLC for about $5 billion to form one of the biggest advertising companies in the world.
Dentsu said Aegis, a leading ad agency in Europe and the U.S.., has a growing position in emerging markets and has recently gained strength in Asian countries outside of Japan. 84 percent of Dentsu's revenue is generated in Japan. Combined, Dentsu said the companies do business with around 71 of the top 100 marketers.
"It creates a compelling combination of geographies and capabilities and resources," said Aegis Group CEO Jerry Buhlmann.
Aegis is based in London. The company's board of directors is recommending that shareholders approve the sale. Dentsu says Aegis had net income of about $105 million and approximately $15.35 billion in consolidated revenue in 2011.
Dentsu said it has bought about 15 percent of the company from Bollore Group, the biggest shareholder in Aegis, and has an agreement to buy another 5 percent from Bollore. It has committed to buy another 6.4 percent of the company from other shareholders, and it said Aegis' directors will vote their shares in favor of the sale. It said the directors own about 4.1 percent of the company.
In total at least 75 percent of shares not held by Dentsu must be voted in favor of the sale in order for the deal to be completed. Shareholders will vote on the deal in August.
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