What does Dentsu's buyout of Aegis means for India?

The recent announcement of Dentsu's buyout of London-based Aegis is one of the most aggressive moves made by the Tokyo-headquartered advertising giant in recent times. The $5-billion cash deal by Dentsu points to how the agency is desperate to mark is ground outside of its home turf, perhaps due to a stagnating home market. Early last year, Dentsu bought out Indian partner Sandeep Goyal's 26 per cent share in its agencies in India as well - making way for more controlled operations. Recently, it brought in ex-JWT talent Rohit Ohri to head its operations here and has since been acquiring talent.

London-based Aegis, meanwhile, is one of the largest independent media agencies outside of communication networks such as the WPP group, Omnicom and Publicis. It has long been viewed as a potential acquisition target by many in the industry. Why? It had divested its stake in its market research arm Synovate to Ipsos last year. Aegis group's existing businesses include global media agency Carat, global digital marketing network Isobar, media communication specialist Vizeum and out-of-home division Posterscope, among others. It had introduced most of these businesses in India with Ashish Bhasin helming affairs for the region as Chairman India and as CEO of Asia-Pacific operations.

Dentsu's buyout, post all formalities, will eventually place it in a stronger position in India. Currently, more than 70 per cent of its revenues come from outside the Asia-Pacific region.  In India, the agency has many Japanese clients as well as several significant Indian brands served by three independent agencies here.

For instance, Dentsu Marcom India handles Honda cars & two-wheelers, Educomp, Canon, DS Group and Monster.com. Its second agency, Dentsu Communications India, handles Toyota, Panasonic, Indian Oil, Indo Nissin, Ingersol Rand, ICICI Direct, Jet Airways, Indian Air Force and some key Delhi Government's accounts.

Its Dentsu Creative Impact, meanwhile, holds the accounts of Maruti Suzuki, Indian Navy and Tetrapak, among others. Together, the Dentsu group in India has a billing is in excess of Rs 1,200 crore and is counted among the Top 10 agencies in India.

Aegis has brands like Philips, Reebok and Adidas - among others - in its portfolio.  The combination is likely to put the joint entity higher up on the list of agencies to be reckoned with.