WPP Emerges Victorious From Grey Auction

13 September 2004

WPP Group has beaten off the likes of French advertising company Havas and private equity firm Hellman & Friedman to win the hand of independent US marketing services company Grey Global.

WPP declined to comment on financial details, but the cash and shares deal is believed to be worth $1.4 billion (€1.14bn; £780m), which values Grey's equity at $1,005 a share.

Despite Havas' keen interest in acquiring Grey in order to boost its US operations, the final moments of the bidding war are believed to have been WPP against Hellman & Friedman with its coalition partner Kohlberg Kravis Roberts.

Grey will add to WPP's impressive portfolio of ad agencies assembled by ceo Sir Martin Sorrell, including J Walter Thompson, Ogilvy & Mather and Young & Rubicam.

In return, the acquisition of Grey provides WPP with a roster of major clients such as Procter & Gamble (the globe's top advertiser), Unilever and GlaxoSmithKline.

The challenge now for WPP is to increase Grey's financial performance using the benefits of synergy offered by operating within a larger group as well as reducing company tax charges.

It is believed that Grey's president/chairman/ceo Ed Meyer will receive $330m-$350m for his holdings and services and will continue to lead the group under the eye of Sorrell.

Data sourced from: Financial Times; additional content by WARC staff