Ad agencies Hakuhodo Inc., Daiko Advertising Inc. and Yomiko Advertising Inc. integrated management Wednesday under a holding company, creating the nation's second-biggest ad group.
Hakuhodo DY Holdings Inc. was set up through an equity swap with a startup capital of 10 billion yen.
In the swap deal, one share in the holding company was exchanged for one share in Hakuhodo stock, while one share in Daiko and Yomiko was swapped for 0.341 and 0.276 shares in the holding company.
The move is aimed at making the three firms' operations more efficient an better able to challenge advertising giant Dentsu Inc.
Their combined unconsolidated operating revenues came to 985.4 billion yen in the fiscal year that ended March 31, compared with Dentsu's 1.37 trillion yen.
In the past fiscal year, parent-only operating revenues amounted to 709.7 billion yen at Hakuhodo, 163.4 billion yen at Daiko and 112.3 billion yen at Yomiko.
In the global market, the Hakuhodo DY group ranks eighth in terms of profits, while Dentsu ranks fifth, according to industry officials.
In another form of collaboration among the three firms, the holding company will create a wholly owned unit, Hakuhodo DY Media Partners Inc., on Dec. 1 by combining the firms' ad purchasing operations.