Agency News: Havas Plans Overhaul, Omnicom Retains

  |  July 31, 2003   |  Comments

Havas will restructure to revive revenues; Omnicom confirms it bought back from Seneca Investments.

Havas Plans Reorganization

Media holding company Havas said on Thursday it would revamp its structure to improve its flagging revenue numbers.

The Paris-based company, which owns more than 300 agencies in 48 countries, did not release details of the shakeup, saying the specialized agencies will be folded into Euro RSCG Worldwide or Media Planning Group. Those agencies Havas deems as not fitting in its plan will be jettisoned, the company said.

"We want Havas to be a leader in our market throughout the world by proposing the most innovative communications solutions," Havas Chairman and CEO Alain de Pouzilhac said in a statement. "This must be reflected in our organization, which must be simplified, rationalized and avoid any duplication."

The details of the reorganization will be announced Sept. 18.

Havas controls a number of interactive agencies, including those under the networks of Arnold Worldwide and Euro RSCG. According to Advertising Age, Havas pulled in $102.2 million in interactive revenues last year, a decline of 16 percent from a year earlier.

The impetus behind the shift was another bleak financial report from Havas. The company reported revenue of €835.6 million in the first half of the year, an 8 percent decline from 2002 based on constant exchange rates. Second quarter revenue was €433.6 million, down 7 percent.

Havas said poor results from Europe dragged the firm down, in addition to marketing tremors from the Iraq war and SARS.

Omnicom Welcomes Back

Omnicom Group confirmed on Thursday it had bought back its controlling stake in from Seneca Investments, an investment group it set up in 2001 to control its interactive agencies.

The move comes after Omnicom repurchased fellow interactive agency Organic from Seneca for $106 million in January. The price paid for was not revealed.

In June 2001, Omnicom sold its stakes in interactive agencies to Seneca Investments, a holding company set up with Pegasus Partners. The company denied reports it set up the arrangement to shield its losses from its interactive agencies. It exchanged its stakes in the companies for shares in Seneca. At the time, Omnicom held a minority shares of both i-shops. Later, Seneca gained full control of the agencies and took them private.

Last June, Omnicom executives said they planned to reacquire both companies, which underwent vast reorganizations. Like Organic, will remain a standalone unit.

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