What’s Maurice Lévy’s game?

Is Maurice Lévy chasing every possible acquisition in the hope that he can outgrow WPP and Omnicom before he retires?   

In the last few weeks Publicis Groupe has acquired businesses in the UK, France, Taiwan and India.   None of them is large, but all are engaged in growth territories and/or disciplines.   Watermelon Healthcare Communications and Healthcare Consulting are engaged obviously in the healthcare sector, Airlock, Holler Digital and Interactive Communications are primarily in social media and other digital, while Kitcatt Nohr and Chemistry are involved in digitally engaged direct marketing. 

Last year Publicis earned a profit of £462 million for its shareholders, still 21% behind WPP’s record-breaking £586 million, so if global dominance is Lévy’s aim, the group still has quite a steep hill to climb. 
And it is getting harder for big groups to grow fast without buying another seriously big company.  To buy a business that on its own could contribute another £125 million of post-tax profit at a stroke, Publicis would have to part with somewhere in the region of £2-£3 billion.  To put that into context, Digitas was generating a profit of less than £30 million before Publicis paid around £700 million to buy it. 
So maybe Maurice Lévy is simply doing what’s best for Publicis, continuing what he described last month as its “well established” two-pronged investment strategy: digital services and high growth markets. With virtually no net debt, he is well placed to hoover up as many businesses as would like to join the Publicis empire.   Or maybe he is still hankering after a big one… 
Bob Willott is editor of “Marketing Services Financial Intelligence” at www.fintellect.com

  • Matthew Charlton

    Is it about market share? I ve always assumed media companies make most of the margin and all the other bits and bobs are there to protect relationships and share.