What: DDB Worldwide, a division of Omnicom Group Inc., has acquired Grupo ABC, the largest independent advertising and marketing communications group in Brazil for approximately US $270 million. The transaction is subject to regulatory approval in Brazil and is expected to close by the first quarter of 2016.
Why it matters: Thomson Reuters deals intelligence data shows that this might be the largest media and advertising industry deal in Brazil since 2008. Grupo ABC owns agencies like Pereira & O’Dell, DM9, Sunset, Dojo and Africa Global, covering public relations, CRM, digital, promotions, events and advertising.
Grupo ABC’s group of agencies consists of brand advertising agencies as well as specialized offerings in public relations, CRM, digital, promotion and events. The group has a diverse network of agencies including DM9 (Sao Paulo), in minority partnership with DDB; Africa and Loducca; CDN, a public relations agency; Sunset, a specialized digital agency; and Newstyle, a promotion and point of sale (POS) company in the country.
Brazilian advertising leaders Nizan Guanaes and Guga Valente, who will continue in their leadership roles, founded Grupo ABC in 2002. The acquisition strengthens a long-standing historical relationship between both holding companies in the region extending as far back as 1997 when DDB first invested in DM9, today one of the largest and most creatively awarded advertising agencies in Brazil.
Global Ad Giants Buy Brazilian Firms
Thomson Reuters deals intelligence data shows that this might be the largest media and advertising industry deal in Brazil since 2008. According to reports, Omnicom has agreed to pay around 15 times annual operational earnings for the company, taking advantage of the Brazilian currency slump which has seen the BRL lose about 70% of its value. Grupo ABC. While the Brazilian economy is currently undergoing a contraction, many global advertising and marketing firms have recently invested in Brazil to strengthen their long-term growth prospects. Recent transactions include Hill & Knowlton acquisition of PR company Ideal, Accenture’s purchase of digital ad agency Dialeto as well as Dentsu-Aegis Network’s acquisition of Brazil’s leading Out-of-Home agency OOH Plus.
“Grupo ABC is widely acknowledged as an outstanding company with impressive creative work and expertise in a broad range of disciplines,” said John Wren, President and CEO of Omnicom Group. “Over the years, Grupo ABC have been great partners of Omnicom and their depth of talent will strengthen our business capabilities not only in Brazil but around the world.”
“This is a world of disruption, scale and innovation and Omnicom will empower our companies to compete in times of extraordinary technological changes,” commented Guga Valente, CEO, Grupo ABC.
“Omnicom has the most creative and awarded agencies in the world and that is something that really matters to me and to all of us in ABC. Together we will be better prepared to serve our clients with all of the innovation and digital capabilities that modern business are demanding nowadays,” continues Nizan Guanaes, Partner and Co-founder, Grupo ABC.
“This partnership will further unite two companies that have long held the same values and creative ambitions,” said Chuck Brymer, CEO of DDB Worldwide. “I have known Nizan and Guga for more than a decade and have sincerely admired their success and influence both in and out of Brazil. It is a tremendous addition to both DDB and Omnicom and we are excited at the opportunity to utilize our combined assets to help our clients generate growth.”
The transaction is subject to regulatory approval in Brazil and is expected to close by the first quarter of 2016.