IPG owns 20 per cent of Daiko Advertising, the fifth-ranked agency in Japan, which has agreed to set up a new holding company with Japan's second-largest agency Hakuhodo and the sixth-placed Yomiko Advertising.
Merger details and the capital structure of the new holding company are not expected until next spring. However, if the current shareholders of all three agencies were to retain proportionate interests, IPG - along with Hakuhodo's Seki family founders, the Asahi Shimbun and Yomiuri Shimbun newspapers, Nippon TV group plus an assortment of trusts and banks - could emerge as major shareholders. The holding company will have combined billings of 1.036 trillion yen (US$8.2 billion) against Dentsu's 1.8 trillion yen, giving it a market share of 18 per cent against Dentsu's 25 per cent and Hakuhodo's 12 per cent. It will be three times the size of the third-ranked Asatsu-DK, in which WPP has a 20 per cent stake.
"We can no longer expect this industry to grow as it once did," said Hakuhodo president Toshio Miyagawa. Media buying will move to a new agency under the holding group, but planning and content will stay with the three agencies.
