TBWA Worldwide, the world’s ninth-largest advertising agency network, will acquire a majority stake in Nippo Corp., a Japanese advertising agency affiliated with Nissan Motor Co., top executives of the three firms announced Wednesday.
TBWA is a subsidiary of Omnicom Group Inc., a communications marketing firm and the largest advertising organization in the world.
The move is seen by industry observers as yet another sign that foreign firms are expressing keen interest in entering various sectors of the Japanese market with the approach of wider deregulation.
TBWA Worldwide’s acquisition will take place this fall, and Nissan Motor Group, which currently holds 55.28 percent of Nippo Corp. stock, will be the second-biggest shareholder of the new advertising agency, with about 10 percent of its stock, they said.
TBWA Worldwide, founded in 1970, made $4.5 billion in 1997 sales and has 5,300 employees in 62 countries. Nippo, founded in 1955, joined the Nissan Group in 1983. It is one of the top 20 ad agencies in Japan, with 280 employees and 40.5 billion yen in fiscal 1997 sales. Takeshi Tanuma, president of Nippo Corp., will become president of the new company.
Through the agreed acquisition of Nippo Corp., TBWA Worldwide is expected to expand its business in Japan, and its executives hope the firm will be able to enhance its multicultural feature. “One of the pieces TBWA is lacking is Asia-Pacific genetic strength. We always thought that we have a lot to learn and absorb from Japan. The idea of taking a majority stake would not be possible if we didn’t think that we would be able to find a partner to make a contribution to our company,” William Tragos, TBWA Worldwide chairman, told a news conference.
Nippo executives will remain on the board of the new firm, and TBWA will send in at most three members to the board. The name of the new company has not yet been decided, the two firms said.
Itaru Koeda, managing director of Nissan Motor Co., said similar moves of releasing stocks of affiliated firms by the country’s second-largest automaker may follow in the future.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.