Dentsu of Japan to Buy Aegis of Britain for About $5 Billion

Dentsu, a Japanese advertising powerhouse that has struggled to expand internationally, made a big leap into Western markets on Thursday, saying it had agreed to buy Aegis, an agency company based in London.

The planned acquisition, valued at £3.167 billion ($4.92 billion), is one of the largest ever in the advertising business, rivaling the purchase of Young & Rubicam by the WPP 12 years ago and a deal for the parent company of Leo Burnett by Publicis Groupe in 2002.

The deal would combine Dentsu, the fifth-largest advertising company in the world, with the seventh largest. Aegis specializes in media buying, a steady source of earnings, and fast-growing digital marketing, leaving slower-growing businesses like the creation of television advertising to other agencies.

International expansion is critical, because the Japanese ad market has been shrinking in recent years. Dentsu this year acquired a boutique agency in New York, ML Rogers, and Bos, with offices in Toronto and Montreal. The deal for Aegis accelerates that the international push, which has been led by a former professional basketball player, Tim Andree.

While Aegis has been considered an attractive takeover target, analysts said a flurry of recent acquisitions by companies like WPP and Publicis made it less likely that counterbids to Dentsu’s offer might emerge.

http://dealbook.nytimes.com/2012/07/12/dentsu-of-japan-to-buy-aegis-of-britain-for-5-1-billion/?nl=business&emc=edit_dlbkam_20120712