Mumbai: US-based advertising and marketing services provider Interpublic Group (IPG) today announced acquisition of advertising agency Lintas India for an undisclosed sum.
IPG already had 49% stake in the acquired company since 1989. The remaining 51% was held by Lintas’ employees through 12 trusts.
Early this year, IPG had submitted an application to the Foreign Investment Promotion Board (FIPB) seeking permission to acquire the remaining 51% stake in Lintas India, so as to consolidate its presence in the country. Both companies refused to comment on the value of the deal.
“This (deal) will allow us to expedite development of Lintas India’s integrated business through closer networking with IPG’s specialized networks abroad. This is all about contemporizing and best meeting the challenges and opportunities of the changing landscape of our industry,” said Stephen Gatfield, executive vice president for Network Operations at Interpublic Group and the CEO of Lowe Worldwide.
While industry experts maintain that IPG’s decision to buyout the remaining 51% stake in Lintas India Pvt Ltd was probably fuelled by the expression of interest by Omnicom Group, one of the world’s largest marketing conglomerates, and the imminent arrival of Bartle Bogle Hegarty (BBH) in India, Gatfield maintained that there were several other factors that contributed to their decision.
“India is taking its place in the world stage. Besides talent, which is world-class, Indian companies are building brands around the world in travel, professional services, auto and industrials like never before,” Lowe Worldwide CEO Stephen Gatfield said justifying the acquisition.
IPG is also likely to outsource some of its production work to India. The company will invest in launching a 24 hour-set up in Mumbai that will work in tandem with their international offices “so as to make smart use of India’s competence and the cost-advantage,” said Gatfield.
In a bid to capitalise on the growing popularity of the “third screen” or mobile phones, Gatfield said that the company is likely to announce a joint venture with a global mobile marketing company very soon.
As far as the set up in Lintas India Pvt Ltd is concerned, no immediate changes in the management have been announced. “There really is no point in fixing something that’s not broken, right?” says Prem Mehta, chairman and managing director of Lintas India. “ This move (acquisition) will further strengthen Lintas India’s success. Being an integral part of a global network will take the employees, the work and the services provided to our clients to the next, 21st century level,” he said.