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Publicis to buy Bcom3 for $3B

March 7, 2002 Posted: 1117 GMT

PARIS (CNN) -- French advertising group Publicis said on Thursday it would buy Bcom3 Group of the United States for about $3 billion.

The deal would create the fourth-largest advertising company and comes at a time when the advertising industry is experiencing its worst recession in almost a decade.

Publicis Chief Executive Maurice Levy said Japan's Dentsu, which currently holds 20 percent of Bcom3, would have a "substantial stake" in the combined group. The deal is expected to be completed by the end of June.

Dentsu told a news conference in Tokyo that its investment would be worth $500 million, giving it a 15 percent stake in the new company.

The advertising industry has been consolidating in recent years as companies, which provide global services and products, demand partners that can provide seamless worldwide coverage.

Publicis, whose client roster includes Coca-Cola, Hewlett-Packard and Nestle, had sought to buy U.S. rival Young & Rubicam but was outbid by WPP. The UK firm won control of Y&R with an offer of  $4.7 billion.

That deal temporarily allowed WPP to become the number one before Interpublic bought True North Communications for $2.1 billion in 2001 to form the biggest ad company.

The year before, Publicis bought U.K.-based ad agency Saatchi & Saatchi for roughly 2 billion euros ($1.9 billion) in stock, creating the world's fifth-largest advertising company.

Bcom3 is based in Chicago and was founded in early 2000. It owns the Leo Burnett Worldwide agency, whose clients include McDonald's, Walt Disney, Mars and Pampers.

Publicis stock has been suspended until 14.00 GMT and closed at 34.65 euros on Wednesday.


• Publicis

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