DDB South Africa, a hitherto non-equity unit of Omnicom's DDB Communications Group, has sold a forty percent stake in its business to a black-owned investment trust listed on the Johannesburg stock exchange.
The purchaser, Cape Empowerment Trust, describes itself as dedicated to “the self-development of previously disadvantaged communities”. Lips are sealed as to the amount of cash changing hands.
Says DDBSA chairman Mike Frampton, who prior to the sale held 90% of the agency: “DDB has given us its blessing and support, and has expressed strong interest in taking equity in the local agency as well.”
The move reflects a general if belated trend among South African agencies to sell equity to black investors – now an imperative for any shop hoping to handle government or quasi-governmental business.
The ‘empowerment ethos’ has also spread rapidly to multinationals operating in South Africa – as DDB learned to its cost last year when it lost the Total South Africa account – a part of the French-owned TotalFinaElf oil colossus. Total cited the absence of black faces amongst the agency’s ownership as the reason for its decision.
Meantime, Shaun Rai, ceo of Cape Empowerment, proclaimed his excitement that “DDB Worldwide has trusted us with their name”. Added Rai: “As a medium-sized business on the way up, DDB South Africa represents excellent upside potential for our shareholders.”
DDB is now said to be poised to unveil a number of ‘significant account wins’ – a happy event not unrelated to the relinquishment of its shares.
Data sourced from: AdAgeGlobal.com; additional content by WARC staff