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TRUE NORTH REALIGNS AGENCY OPERATIONS TO SIGNIFICANTLY STRENGTHEN GLOBAL POSITION CHICAGO Sept. 9 True North Communications (NYSE: TNO) announced that, effective today, FCB Worldwide becomes the banner for a new top-tier global advertising agency, combining FCB with Bozell's international offices along with Bozell Detroit and Costa Mesa to become the 5th largest global agency in billings. Additionally, Bozell's other U.S. offices form a top 20 national agency brand in billings. The company's Board of Directors approved management's recommendation on the initiative at a special meeting late yesterday after a thorough strategic review held over several months. David Bell, Chairman and CEO of True North, said, "We're committed to being a world leader in advertising and communications services, offering our clients seamless and global solutions. With the new FCB, our clients now have a more powerful global resource. And we're strongly positioned to serve leading marketers as they continue to consolidate their advertising and communications business worldwide." True North advertising agencies currently serve more than two dozen major marketers on a global basis, and have relationships with over 40 of the nation's top 200 marketers. "In addition," Bell said, "Bozell continues as one of the premier agency brands in the country, with a strong collaborative culture and deep expertise in building brands for major clients." Continued Bell, "This is an important global initiative for True North. It provides a platform for our agencies to better serve clients and to grow their businesses worldwide." He added, "We'll move swiftly to build on this new corporate framework. We plan to focus significant resources over the next few years on acquisitions and further expansion of the FCB network internationally, especially in Europe." FCB: A Top-Tier Global Brand
The new FCB has a significantly more global profile, with 40% of its billings internationally and 60% in the U.S. market (approximately $3 billion and $5 billion, in respective billings). True North named Brendan Ryan, formerly Chairman and CEO of FCB Worldwide, as CEO of the new combined agency. Brendan Ryan said, "Both FCB and Bozell have been enjoying an excellent 1999, and this move builds on that momentum, making the new agency dramatically bigger and stronger, literally overnight. We all know that 'being big' is not an end in itself, but it sure helps in today's consolidating business world. Continued Ryan, "Being #1 in the United States and #5 worldwide will definitely help this 'new FCB' better keep pace with the changing needs of our clients such as AT&T, DaimlerChrysler, Nabisco and SC Johnson, and others who themselves are becoming even bigger players in the global marketplace." Leo-Arthur Kelmenson, formerly Chairman and CEO of Bozell Worldwide, became Chairman of the new FCB. He commented, "We're putting together tremendous brand-building experience, a depth of worldwide creative talent, full global communications capabilities, and technological strength." He underscored that FCB and Bozell have helped clients build such brands as Amazon.com, AT&T, Coors, Dockers, Gatorade, Jeep, Kawasaki, Mattel, Nabisco, Raid, Ray Ban, US Postal Service and many others. Kelmenson also said, "There's a strong fit between Bozell and FCB. We share many core beliefs: FCB's commitment to 'person to person' communications solutions closely parallels Bozell's philosophy and its entrepreneurial spirit. In addition, we're both firmly committed to client-focused, seamless solutions, or what Bozell has called 'media neutral' solutions." Looking forward, Brendan Ryan said, "The new FCB will be unified behind a singular vision that both agencies frankly share: That our business is all about selling our clients' products today and building brands over time. And as our new company goes forward, our ability to do this across the full spectrum of communications including not only advertising but direct marketing, telemarketing, interactive, all connected through database marketing, will further make person to person communications even more of a reality." Bozell: A Strong National Agency
Gene Bartley, President of Bozell's North American Operations, was named Chairman of Bozell. Gene commented, "I think this will be great for all of us. The new structure enables us to build on our strengths in the U.S. market, where we have been very successful, and drive further growth momentum. We'll continue our commitment to media neutral solutions, collaboration and entrepreneurship." Integration Process The new realignment follows a number of other recent collaborative initiatives within True North. Most recently, the company formed Marketing Drive Worldwide in July as a global marketing services brand, combining units from Bozell and True North. Senior executives from Bozell, FCB and Temerlin McClain currently serve on Marketing Drive's management board and the ad agencies share in its success. Commented CEO David Bell, "We've put the focus on bringing our people and resources closer together to strengthen our services to clients, rather than on supporting infrastructure." True North anticipates that once the combination is complete it will create expense savings of close to $25 million or $.25 per share on an annualized basis, primarily due to administrative and operating efficiencies. To effect these savings, the company will record restructuring and other unusual charges in the third quarter of 1999 of approximately $65-$75 million pretax. Strategic Acquisitions: Next
Phase of the Global Plan In addition to further expanding FCB's leadership positions in key international markets, True North said that it will continue to build its Diversified Companies brands with a focus on making BSMG Worldwide and Marketing Drive Worldwide global leaders in public relations and marketing services, respectively. True North will also seek to acquire entrepreneurial companies with the ability to become major players in emerging sectors in technology and multicultural marketing, where True North already has strong positions. Last week, True North's Diversified Companies group announced that it has taken a 49% stake in Don Coleman Advertising, a leading African-American agency, making True North's New America Strategies Group the leading multicultural agency network. Bell concluded, "Moving forward, we believe this is the right structure for achieving our top priorities of stronger organic growth and operating margin." End Notes Cautionary Statement
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