WPP CEO Sir Martin Sorrell
The merger between STW Group and WPP has been approved in the wake of the WPP’s move to take a controlling interest in the Australian-based business it has partnered for 17 years.
The Australian Competition and Consumer Commission announced it will not hold public hearings into the ‘mergers’, paving the way for WPP – the world’s largest marketing services holding group – to complete the purchase of 61 per cent of STW by way of a share swap.
This deal will see agencies under the STW banner including Ikon Communications, The Brand Agency and Tongue come under the same banner as the likes of Mediacom, Y&R Group and MEC.
The two groups already have some shared interests including Ogilvy, JWT, Maxus, Mindshare and DT.
Mumbrella first revealed the full details of the merger late last year after STW shares were suspended from trading.
In a statement to the market STW said it was “pleased to announce” that a public hearing into the deal would not be held.
The acquisition still requires shareholder approval and STW expects to be able to provide further advice in February.
WPP’s investment in STW, after years of sitting as a passive investor in the company, is expected to trigger a round of cost-saving measures involving back room operations.
At the time the acquisition was announced, Sir Martin Sorrell told Mumbrella that he expected STW to reduce its focus on Asian markets where it had been looking for growth and build its Australian operations.