WPP sets sights on Jupiter to raise its game in SA advertising market
January 20, 2009
By Thabiso Mochiko in Johannesburg
Global media and advertising group WPP is seeking to increase its South African holdings with the proposed acquisition of a stake in the Jupiter Drawing Room, a local advertising agency.
New York- and London-listed WPP has a presence in South Africa through shareholdings in Grey Global Group, JWT, Young & Rubicam, and Ogilvy Public Relations Worldwide, as well as its advertising arm.
Last month Jupiter as well as WPP, through its subsidiary, Cavendish Square Holding, filed merger documents with the competition commission.
It is not clear how much WPP plans to buy in Jupiter, however, it is likely the black shareholding will still be within the required government target.
Jupiter Drawing Room Johannesburg is 57 percent owned by MSG Rimani, which is jointly owned by Given Mkhari, Simphiwe Mdlalose and Mohale Ralebitso. MSG Rimani also owns 26 percent of Jupiter Drawing Room Cape Town.
The transaction is expected to be finalised next month.
Jupiter Drawing Room is one of the biggest advertising agencies in South Africa and boasts lucrative advertising contracts from companies such as Absa, Edgars, Jet, MTN, as well as SAA.
Last year WPP and its subsidiaries bought into media and advertising, marketing and pubic relations companies in Kenya, South Africa, the Czech Republic, Denmark, Vietnam, India and China, to offset the slowdown in the US and the UK.
In October it announced the acquisition of a 33 percent stake in Johannesburg-based Smollan Holdings.
The Smollan Group, which employs 12 000 people, operates in other African countries and India. It has strategic alliances in Europe, North America, Central America, Asia, as well as Australasia.
WPP said the Smollan investment would continue WPP's strategy of developing its networks in fast-growing markets and sectors.
Smollan Group's revenues for the year to last February were R847 million, with gross assets of R284million.
WPP also bought a 27.5 percent stake in Scangroup, a Nairobi-listed advertising and marketing communications services company. Scangroup's focus is on media planning and buying services, and specialist communications.
WPP hopes to benefit from the 2010 World Cup. In October it reported a 29.4 percent rise in revenue in the Asia-Pacific, Latin America, Africa and the Middle East to £439 million (R6.4 billion).
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