M&A frenzy looking set to continue

<p>The mergers and acquisitions trend within the advertising industry </p><p>looks set to continue in 2000, according to a MEDIA poll of regional </p><p>agency heads. </p><p><BR><BR> </p><p>Almost 80 per cent of Asia-Pacific chiefs signalled that they would be </p><p>involved in mergers or acquisitions of one type or another this year, </p><p>while three-in-four stated that they were involved in similar activities </p><p>in 1999. </p><p><BR><BR> </p><p>The most high profile involved Lowe & Partners combining with Ammirati </p><p>Puris Lintas, The Leo and MacManus groups allying with Dentsu to form </p><p>BDM, and FCB taking over Bozell. </p><p><BR><BR> </p><p>However, there have been countless mergers and buyouts on a smaller </p><p>scale. </p><p><BR><BR> </p><p>They include Carat and Saatchi & Saatchi launching a JV in Taiwan and </p><p>Vietnam respectively, Grey and McCann-Erickson buying out local partners </p><p>in Malaysia and Korea respectively, and OgilvyOne Worldwide acquiring a </p><p>stake in Singapore-based Cybersport. </p><p><BR><BR> </p><p>The consolidations are being spurred on by the fact that agencies feel </p><p>they need to be bigger in order to be more competitive by taking </p><p>advantage of cost-saving synergies and improving efficiency on the </p><p>operational level and on the servicing of global and regional </p><p>accounts. </p><p><BR><BR> </p><p>The merging of the huge global agency networks is pushing their smaller </p><p>network counterparts to merge or forge new alliances in a bid to </p><p>survive. </p><p><BR><BR> </p><p>According to Euro RSCG Asia-Pacific CEO Vincent Digonnet, this is </p><p>resulting in agencies being either small or big, but not in between. </p><p><BR><BR> </p><p>"Currently, the second tier networks have to get together to survive as </p><p>networks. The communication scene is polarising more and more between </p><p>worldwide networks and local shops. There is no room in the middle," he </p><p>told MEDIA. </p><p><BR><BR> </p><p>He echoed the sentiments of other regional chiefs by saying the </p><p>consolidation trend is being accelerated by the fact that clients are </p><p>increasingly merging with each other "to put the emphasis on fewer, but </p><p>better brands". </p><p><BR><BR> </p>