MUMBAI: STW Group, Australasia’s marketing content and communications services group, comprising over 75 operating companies, is all set to merge with WPP’s Australian and New Zealand businesses.
Martin Sorrell helmed WPP has acquired a 61 per cent controlling stake in STW for approximately $512 million, of which $387 million will be paid via new shares with STW assuming debt of $125 million.
Post the merger, STW CEO Michael Conaghan will continue in his current post and Robert Mactier will also remain chairman of the company.
Mactier said, “Bringing together the respective iconic brands and wonderfully talented people of STW and WPP Australia and New Zealand under a single common ownership and will unlock tremendous local and global capability, experience and efficiencies for our clients as well as establishing a fantastic platform for our people to prosper.”
“The transaction is EPS accretive as a result of the issue of new STW shares at a premium to market and also delivers a material reduction in STW’s leverage and the opportunity to unlock a range of synergies thereby creating significant value for our shareholders. Importantly, binding governance protocols and shareholder protections have been agreed for the benefit of the continuing minority stakeholders. I consider this a genuine win-win transaction for all our stakeholders. Post completion, we look forward to working seamlessly with WPP as our major shareholder and strategic partner as we embark on the exciting journey that is in front of us,” he further added.
Connaghan said, “To finally align our shareholdings in those existing partnerships (J Walter Thompson, Mindshare, Maxus and Added Value) and now to expand our relationships across the full STW and WPP Australia and New Zealand portfolio of companies is an amazing opportunity. WPP is the leading player on the global stage in our industry. We have the potential to create a group unparalleled in this part of the world, totally focussed on our home markets, but allowing our clients and people open access to the best thinking on a global level.”
Sorrell added, “The merger of our Australian and New Zealand operations with STW, will give us a unique opportunity to offer our local and international clients a comprehensive set of services and to make sure we can offer the best talent through country management. It will also enable STW to focus on the Australian and New Zealand markets, which it knows best, with a structure that will strongly incentivise its people.”
