Advertising firm Publicis SA announced this week that it will be purchasing Saatchi & Saatchi PLC for about $1.9 billion in stock. This will effectively create the fifth largest advertising company in the world.
Shareholders of Saatchi will receive about 500 pence a share which is a 19% premium on the company’s closing stock quotes and a 39% premium over the average price of the stock over the past three months, reports CNN Money.
Publicis was seeking out Young & Rubicam Inc., but was outbid by WPP Group PLC which bought the firm for $4.7 billion. This gave WPP leapfrog Interpublic.
Saatchi conducts about half of its business in the U.S. which accounted for about 70% of its profits in 1999. The new company will be named Publicis Groupe SA and will be listed in Paris and New York.
The new firm will also combine Publicis’s Optimedia and Saatchi’s 50% stake in Zenith Media the report continues.
Saatchi will own 31% of the combined firm.