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Amid the market gloom WPP are victors in the battle for TNS in a £1.1 billion deal, its not all gloom and doom. City Desk
Sir Martin Sorrell the Chairman of the worlds largest advertising group WPP based in Mayfair, is celebrating this weekend the takeover of TNS following a 6 month battle, in a £1.1 billion deal.
Amid the volatile markets WPP proceeded to insist on the value of the TNS acquisition which sees WPP now add TNS to its group of companies to make it the second largest market research group in the world and arguably the largest advertising/ communications company in the world.
The Fitch ratings agency today reacted badly to the completion of the deal by receiving the news "warily" given the global advertising market is expected to show negative growth:
"A long and deep recession, and associated advertising downturn, could see WPP's credit metrics stretched above what is appropriate for a BBB+ rating for an unacceptable period of time," the agency said.
The deal has been a priority for Sorrell who outlined last year how important it was for WPP to grow in market research via more acquisitions.
WPP has been criticised by the Evening Standard this week for planning to domicile its registered offices in Ireland to avoid the foreign profits tax rule which would penalise WPP heavily. Chris Blackhurst from Standard said of Sorrells decision to move WPP to Ireland:
"I'm more than puzzled: I'm angry. When Sorrell first raised the possibility he may remove his company’s profits from the clutches of the UK taxman I, like many others was quick to condemn the Government saying Gordon Brown had only got himself to blame for presiding over a taxation system that was too complex. This move however is not his finest. Frankly it sticks in the craw. Even the way it was announced during the worst crisis we have faced in years smacked of deliberate timing."
Sorrell has himself accepted the current problems in the markets with him saying recently:
"The next 15 months are not going to be easy."
WPP companies include JWT, Ogilvy & Mather, Grey London, Finsbury PR, Buchanan PR, Mindshare and others in over 100 countries employing over 50,000 worldwide. WPP shares traded down today to 367.00 -27.25 (-6.91%)
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