Published on March 19, 2001.

New York--The Interpublic Group of Cos. agreed to acquire True North Communications today in a deal valued at $2.1 billion. Interpublic will exchange 1.14 shares for each of True North's 51 million outstanding shares. The purchase of Chicago-based True North would give Interpublic control of the FCB Worldwide and Bozell Group ad agencies.

The deal marks the end of a closely watched auction that saw True North linked with a variety of potential buyers, including France's Havas Advertising SA and Britain's WPP Group PLC.

The acquisition makes Interpublic the largest ad agency holding company in terms of billings and revenue.

Takeover target

True North was considered a likely takeover target following its loss in November of DaimlerChrysler Corp.'s consolidated $2.4 billion global Chrysler advertising account to Omnicom Group. The account represented about 9% of True North's revenue and as much as 25% of its profits. In 2000 the company reported revenues of approximately $1.5 billion.

Interpublic, which counts The Lowe Group and McCann-Erickson WorldGroup as its two global agency networks, gains a third in True North's FCB Worldwide. Also joining Interpublic's portfolio are smaller True North agencies Bozell Group and Temerlin McClain, both of which Interpublic said generated $2.6 billion in billings in 2000.

North American dependence

According to a company release announcing the deal, advertising and media revenues represented 59% of Interpublic's revenues in 2000. With the acquisition of True North, Interpublic predicts revenues to increase to 60%. In terms of geography, in 2000 Interpublic drew about 55% of its revenues from North America. With True North, domestic revenues will represent 59%.

With True North, Interpublic will have offices in more than 130 countries.

Top executives

True North's chairman and CEO, David Bell, will be named vice chairman of Interpublic, and Brendan Ryan, CEO of FCB, will maintain his position.
Shares of Interpublic were trading this morning at $33.60 a share on the New York Stock Market, down $1.70 from Friday's close.