WPP Buys Grey Global Group

WPP Group has confirmed its acquisition of Grey Global Group, for a consideration of $1,005 per Grey share or $1.52 billion. The deal will see Grey Global Group CEO and chairman Ed Meyer continue in both capacities until at least the end of 2006. Meyer will also remain CEO and Chairman of Grey Worldwide until a successor is appointed, which has been targeted at six months after completion, after which he will join the WPP board. Meyer is also expected to net $40m personally from the deal. WPP has also confirmed that Grey will operate as an independent unit within WPP and has targeted the agency to increase its operating margin to 10.5 per cent in 2005, from its current level of 5.8 per cent - which is markedly lower than the industry average. MediaCom - according to a WPP statement - "will explore opportunities to leverage the media buying scale of Group M". The acquisition brings Procter & Gamble, the world's largest advertiser, into the WPP stable of clients despite the existing presence of key J. Walter Thompson client Unilever. It also means that the holding company now operates four global advertising companies and four media networks.