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- Dubai 04:53 06:06 12:12 15:35 18:12 19:26
Global media group WPP has acquired a majority stake in UAE-based media organisation Team Y&R Holdings, Emirates Business has learned. The holding group, in which WPP has held a minority stake since 1999, operates in the Middle East and North Africa through firms such as Team Y&R, Asda’a, Intermarkets, Mediaedge:cia, Polaris and Wunderman.
Joseph Ghossoub, chairman of Team Y&R, said: “It’s a merger between the two companies and we will confirm that with an official communiqué that will be broadcast to the media within a day or so.”
Even though WPP has now moved from a minor shareholder to a majority stake holder, Ghossoub refrained from calling it a take-over.
“This is not a takeover, but in fact a merger between the two companies. We are in the process of formulating an official press release to this effect,” said Ghossoub.
WPP became a marketing services company when Sir Martin Sorrell took over Wire and Plastic Products, a UK manufacturer of wire baskets, following his search for a public entity through which to build a worldwide marketing services firm. Soon after the acquisition, WPP moved its core competence to “below-the-line” communication.
A series of takeovers and mergers followed globally to make WPP the largest advertising and marketing communications company in the world.
Merger talks with the UAE-based Team Y&R were initiated more than 18 months ago, according to industry sources, and they were finally sealed and conveyed by WPP on February 29. “The Team Y&R group bargained for time, and stretched the discussions, intending to increase their equity value and then eventually seek the best price,” said an industry insider.
Team Y&R has significant operations in the UAE, Saudi Arabia, Lebanon, Kuwait, Morocco, Jordan, Qatar and Oman and employs more than 1,200 people. Major clients include Emaar, etisalat, Ford, Microsoft, Sony Ericsson and Visa. Team Y&R’s unaudited consolidated revenues for 2007 were $100 million (Dh367m), with gross assets for the same period at $242m. The stake investment continues WPP’s strategy of developing its networks in fast growing markets and sectors.
WPP is a listed on the London and New York markets and was quoted at £585.50 in London and $58.40 in the US yesterday. “It won’t be a surprise to see WPP going the IPO route,” said another industry analyst, stating a corporate of this level needs more financial backing.
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