Shareholders of Grey Global Group, the advertising industry's last major independent, voted to sell the company to WPP Group PLC, a British marketing conglomerate.
WPP closed the deal yesterday with a $1.7 billion cash payout, of which $500 million goes to Grey chairman/CEO Edward H. Meyer. Grey, which includes Grey Worldwide, Grey Direct and MediaCom Worldwide, posted estimated revenue last year of $1.47 billion.
Meyer will continue to run Grey as an independent unit of WPP, which owns agency brands such as J. Walter Thompson Co., Ogilvy & Mather and Young & Rubicam. Grey is headquartered in New York.
WPP, the world's No. 2 ad conglomerate after Omnicom Group Inc., beat France's Havas Advertising and San Francisco-based private equity firm Hellman & Friedman to acquire Grey. The bidding war was conducted last summer.
Grey was founded in 1917 as a direct mail shop and went public in 1965. The agency serves clients like Procter & Gamble Co., 3M, Adobe, JP Morgan Chase, ConAgra, Hasbro, Mars, Warner Bros. and Boehringer Ingelheim.
The sale to WPP will not affect Grey Direct. That division handles clients such as GlaxoSmithKline, Xerox Corp., United Airlines, Oracle Corp., Adobe, BellSouth and Cendant.
Besides a larger geographical footprint and a stronger presence in the fast-growing Latin American and Asian markets, a major reason for the Grey purchase is WPP's aim to further diversify into marketing services as distinct from brand advertising.
The enlarged WPP-Grey entity is expected to receive almost half of its revenue from brand advertising and media management. The rest is from marketing services, which include public relations, sales promotion, corporate identity and design, direct, interactive, information insight and consulting along with online services.
Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters