Us Ad Agency Pockets 20% Stake In Madison

US-based advertising agency DMB&B Worldwide has picked up a 20 per cent stake in Madison Advertising in consonance with an agreement reached between the two companies three years ago.

DMB&B is slated to further hike its holding to 40 per cent next year and thereafter progressively every three years till it reaches 74 per cent.

Madison chief Sam Balsara, speaking to Business Standard, confirmed that DMB&B now holds 20 per cent in Madison.

The Foreign Investment Promotion Board (FIPB) had approved the equity infusion by DMB&B earlier this year and a fresh application for hiking it by another 20 per cent will soon be forwarded. Arthur Anderson is advising DMB&B on the issue.

 

Madison and DMB&B had joined hands three years ago and as per the terms agreed upon, the foreign agency would ultimately hold 74 per cent in Madison.

The stake would be acquired in different stages beginning with 20 per cent in the first stage.

Balsara said that several aspects of the transaction would have to remain confidential and refused to disclose the price which DMB&B paid for Madison's equity.

With the acquisition, Madison joins the long list of advertising agencies where foreign agencies hold substantial equity. Speer Advertising was the latest to join the bandwagon with Ogilvy & Mather picking up 80 per cent stake of its equity.

The others include Hindustan Thompson Associates,(HTA) Ogilvy & Mather, Lintas, Mudra Communications, Contract and Equus.

While Hindustan Thompson Associates, Speer, Ogilvy & Mather, Contract and Equus are a part of the