Leaders

*

WPP merges Australian & NZ Businesses with STW Communications Group

Published by

WPP, the world's largest holding company, has announced an agreement to merge its Australian and New Zealand businesses with STW Communications Group Limited, thereby increasing its shareholding from 23.6% to 61.5%. The merged group will have pro-forma LTM revenues of $1 billion and EBIT of $142 million and will become the primary vehicle for WPP in Australia and New Zealand. Following the merger, STW will change its name to align it with WPP. The transaction will be structured through a contribution of WPP's Australian and New Zealand businesses into STW, for an enterprise value of $512 million, with consideration consisting of the issue to WPP of new STW shares and a shareholder loan.

WPP has announced an agreement to merge its Australian and New Zealand businesses with STW Communications Group Limited

*

WPP CEO Sir Martin Sorrell

The STW Shares will be issued to WPP at $0.915 per share, representing a premium of 30% to the 10 day VWAP prior to the date of this announcement. WPP will move from a 23.6% interest in STW to become the majority shareholder with a 61.5% equity interest. WPP will also have the right to appoint a majority of Directors to the STW Board. The transaction is conditional on STW shareholder approval and the approval of the Australian Competition and Consumer Commission and the Foreign Investment Review Board. STW is maintaining there will be no job losses despite the deal being forecast to find efficiencies of around $15 million per year through shared services, with the combined group expected to have around 5,500 employees.

STW offers clients a comprehensive and integrated range of marketing, content and communications services

**

Founded in 1985, and listed in 1994, STW offers clients a comprehensive and integrated range of marketing, content and communications services. WPP has been an investor in STW since 1998, and the two companies have worked together on a number of ventures, including Ogilvy PR Australia. STW owns part or all of some 70 companies including Ikon Communications, the White Agency, The Brand Agency and Tongue, as well as a minority stake in media agency Bohemia. It partners with WPP in the Ogilvy, Mindshare and JWT businesses.The merger continues WPP’s strategy of investing in important geographic markets and to advance “horizontality’ to ensure their people work together for the benefit of clients.

The merged group will have pro-forma LTM revenues of $1 billion, and will become the primary vehicle for WPP in Australia and New Zealand

*

STW CEO Mike Connaghan

STW CEO Mike Connaghan, who will stay on in the role, has said that WPP approached the company earlier this year about a merger, said: “Bringing the two together, to me, always made a lot of sense, it was just making sure we could get a sensible deal done. WPP was very keen to have its businesses involved in the transaction so it could get to a place where it has local management of all the assets of WPP and STW and that's my new job with the new company.” WPP CEO Sir Martin Sorrell added: “The merger of our Australian and New Zealand operations with STW, will give us a unique opportunity to offer our local and international clients a comprehensive set of services and to make sure we can offer the best talent through country management. It will also enable STW to focus on the Australian and New Zealand markets, which it knows best, with a structure that will strongly incentivise its people.”

**

Comments

More Leaders

*

Leaders

Social commerce: why we must not ignore this new ROI goldmine

As we ease back into a new normal and things start opening up again, there are new avenues of profits for brands and advertisers worldwide that simply can't be ignored. Our favourred social media platforms have turned into proper digital...

Posted by: Creativepool Editorial
*

Leaders

Make to Treasure. Adding true value to the art of production

A few months ago, and sort of by accident, I coined the phrase ‘Make to Treasure’. It was in the process of writing our first update on sustainable production at the end of a steep learning curve of a year. A year we’d started out...

Posted by: Heather Golding
*

Leaders

The creative, fascinating and overlooked history of the lyric video

What was the world's first lyric video? How was it born, and why was it important? Lyric videos often do more than show you simple words on screen. They are creative pieces of motion capture and/or production, they capture the viewer's imagination...

Posted by: Creativepool Editorial
ad: