Monday, June 28, 2010

Media Decoder: Interpublic Acquires Agency to Strengthen London Operations of Lowe

The Interpublic Group of Companies is again taking steps to bolster the operations of a major office of its Lowe & Partners Worldwide agency.

Interpublic said on Monday that it had reached an agreement to acquire Delaney Lund Knox Warren from the Creston Group for about $40 million (27 million pounds) in cash. Delaney Lund Knox Warren, which was founded in 2000 and is based in London, is to be merged with the London office of Lowe to form DLKW Lowe.

The deal is subject to approval of Creston shareholders, who are to vote on the agreement on July 13.

The merged office will be led by the senior managers of Delaney Lund Knox Warren, who will have a minority ownership stake in DLKW Lowe.

Lowe, which has its headquarters in London, is the smallest of the three major agency networks owned by Interpublic, trailing McCann Erickson and DraftFCB. Interpublic has recently been seeking ways to strengthen what it calls the “hub market” offices of Lowe.

In October, Interpublic merged the United States operations of Lowe into the New York office of Deutsch in a realignment that placed Deutsch under the Lowe umbrella and erased the Lowe name per se from the American market. Deutsch, which Interpublic bought in 2000, also assumed responsibility for the Canadian operations of Lowe.

Interpublic has also made deals to improve Lowe’s status and standing in Brazil and India.

The top managers of Delaney Lund Knox Warren who will lead DLKW Lowe are Greg Delaney, Tom Knox and Richard Warren. They will report to the leaders of Lowe & Partners Worldwide: Tony Wright, chairman, and Michael Wall, chief executive.

The two executives who had been leading the Lowe London office — Robert Marsh, who oversees the office’s important Unilever account, and Rebecca Morgan, chief strategic officer — will stay on, reporting to Messrs. Delaney, Knox and Warren.

DLKW Lowe will have 253 employees, 167 from Delaney Lund Knox Warren and 86 from the Lowe London office. The merged office is to retain all the clients from both sides, which in addition to Unilever include General Motors.

In 2006, the Lowe London office suffered a blow when it lost a major client, Tesco, along with senior managers who included the Lowe & Partners founder, Frank Lowe. They left to form a rival agency in London, called Red Brick Road.

Last year, trade publications reported, the Lowe London office lost two large clients, the Peperami food brand sold by Unilever and a department store, John Lewis.

A cautionary note to the deal is that in the last 15 years, Interpublic tried many times to beef up Lowe in the United States through mergers.

In some instances, Interpublic acquired smaller agencies and merged them into the Lowe American operations; they included Scali, McCabe, Sloves and Goldsmith/Jeffrey.

In other instances, Interpublic merged agencies it already owned with Lowe, among them Ammirati & Puris Lintas and Bozell.

In all cases, the combinations really never gelled, leading to the decision by Interpublic in October to throw in the towel on the Lowe name in the United States and to go forward with the Deutsch name as the North American hub office of Lowe...Media Decoder

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