One brand, synergies and ‘high priority’ contracts: What happens next in the APN Outdoor and JC Decaux merger
Consolidation across marketing and sales, re-badging APN Outdoor assets and educating agencies are among the priorities for newly promoted JC Decaux Australia and New Zealand CEO, Steve O’Connor.
O’Connor, who was announced as CEO of the combined APN Outdoor and JC Decaux business on Friday, admitted the process would be difficult and slow in parts.
O’Connor will focus on synergies, re-badging and complimentary assets
“Collectively we have 450 staff, we are all sitting in different offices at the moment. We want to bring the business under one brand and one operation, so we’ll be focused on doing that over a period of time,” O’Connor told Mumbrella.
“Probably the first and more significant departments we will bring together are the sales and marketing teams. There’s internal communications, and external – going to market, sales collateral, joint email signatures – all those sorts of things will happen reasonably quickly, in the first quarter of next year.
“But in terms of re-badging all the assets that’s a very expensive thing to do so we’ve got some high priority contracts we’ll do first and then we’ll work through that over a period of six months or so.”
O’Connor’s comments come almost a year after he and chairman and co-CEO of JC Decaux, Jean-Francois Decaux, sat down with Mumbrella, to outline the future of the business. At the time, both O’Connor and Decaux told Mumbrella the priority for the next 12 months was the City of Sydney tender. But that all changed in June, after Ooh Media bid to acquire Adshel.
APN Outdoor was the other bidder, upping Ooh Media’s $470 million offer for Adshel to $500 million. APN Outdoor continued to up its offer, bidding $540 million for Adshel but was ultimately unsuccessful against Ooh Media.
Shortly afterwards, JC Decaux made a bid for APN Outdoor, and was later successful. Last Monday, APN Outdoor shareholders resoundingly approved the $1.2bn offer by French out-of-home giant JC Decaux to acquire the business. On Friday, APN Outdoor CEO James Warburton announced he would leave the business at the end of the month.
Re-badging APN Outdoor assets will be a slow and expensive process
There are a number of major contracts sitting under the soon-to-merge business. On JC Decaux’s side is the City of Sydney contract, Yarra Trams and a telecommunications contract with Telstra. APN Outdoor has tenders for Sydney Airport, Queenstown Airport, VicRoads, Roads and Maritime Services, Sydney Trains, Transport Brisbane and Transdev Melbourne, and Sydney Buses.
“It was always part of our plan to grow like we had this year…but last year we certainly didn’t anticipate finishing the year with this acquisition,” he said.
“We thought we’d focus on what we have and making sure we do a good job of that but things change and we want to be part of the consolidation that is happening and we could be so we did.
“It wasn’t hard to get everyone to come along for the ride – but managing all the things that go along with growing at a great rate and also having a lot of pressure to do a lot of external things that weren’t initially part of the plan and managing people’s motivation and making sure the culture doesn’t fall apart.
“But the team have just been amazing, I couldn’t be more proud of them, the way they’ve responded to the challenges we’ve had. No rest for the wicked.”
O’Connor is not concerned with educating advertising agencies of the changes, noting the industry is used to change and accepts movement easily. He added the acquisition would allow more potential for new formats – from JC Decaux’s global business – to enter the Australian market.
Outside of the APN Outdoor and JC Decaux merger, there are a number of areas O’Connor has focused on in the last 12 months. One of those is the City of Sydney tender, which JC Decaux will compete to retain, and the other is transparency in measurement of out-of-home. Last year, O’Connor said anyone could look into his business, as it was squeaky clean.
“We are certainly not guilty of the things that some of the other companies are being accused of. We’ve stuck rigidly to one in six, that’s what we’ve always done and what we will always continue to do. So we are very very happy for this debate to crack on because we are squeaky clean,” he said at the time.
On Friday, O’Connor said he believed APN Outdoor aligned on these views, but admitted he would have to look into the new business further to “better understand”.
“I’d imagine so, they’ve always been an ethical business and I suspect so but whether we will be completely aligned I need to do some homework on that,” he said.
But he is confident the values of the two businesses align.
“We’ve always liked the way they do business. They are really disciplined, they focus on what they are good at, they are very considered in the way they go about their business. It is becoming two companies that are very like-minded, we share the same values for sure.”
Congratulations to Steve. That’s got to be a very important, not to mention popular and well deserved appointment, for the task of merging of these two entities and future success. Well done Steve.
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Agreed Robbo !
The new entity is in great hands !
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Good to see such a highly respected gentleman of the industry still finding time, when appropriate passing constructive or congratulatory comment on industry matters. Pretty sure Merchant and Partners opened their doors as a buying house in 1974 and 1 of the founders still kicking goals after 45 years almost. Schooner was pretty cheap at Surry Hills in those days, i remember making sales calls late arvo and just had to have the 1.
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Well done Steveo
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