French ad giant admits it’s trying to acquire Cheil

The chief of the French ad giant Publicis Groupe confirmed that it is in talks to buy Cheil Worldwide, the advertising arm of Samsung Group, during a first-quarter earnings announcement on Wednesday local time.

Maurice Levy, president of Publicis Groupe, cited the acquisition of Cheil Worldwide as a possible option for this year.

“We don’t expect this year to be a year of large or numerous acquisitions, with the possible exception of Samsung’s ad agency, Cheil Worldwide,” he said.

The remark ended months of speculation that Samsung was in negotiations with Publicis Groupe to sell a controlling stake in the company.

Still, Levy indicated that the discussions weren’t going smoothly. He said the discussions have had “ups and downs” and that “we are in a plateau today.”

Levy said the acquisition of Cheil Worldwide would strengthen the digital expertise of the French company and expand its global footprint.

Both Samsung Group and Cheil Worldwide declined to comment, saying that the discussion is private.

Entering this year, rumors arose that Samsung Group’s other affiliates - including Samsung C&T and Samsung Electronics, the two largest shareholders in Cheil Worldwide - planned to sell their 28.44 percent combined stake to Publicis Groupe in a bid to streamline its business.

A Bloomberg News report in January that Publicis Groupe was considering an offer for a controlling stake in Cheil Worldwide strengthened the speculation.

At the time, Cheil Worldwide denied the report, but said its shareholders were holding some kind of negotiation with foreign firms. It didn’t specify the type of negotiation.

Cheil Worldwide’s latest purchase of a U.K. marketing firm brought the possible deal into the spotlight.

The company said Tuesday that Iris, its subsidiary operating in the United Kingdom, took over Founded, a marketing agency based in London, a move intended to expand its presence in overseas markets.

Some analysts thought the acquisition in the United Kingdom was a sign that the deal with Publicis Groupe was not going to be clinched.

Started in 1926, Publicis Groupe is one of the Big Four global ad and marketing agencies, with operations in over 202 cities in 105 countries. Its customers include multinational brands like Volkswagen and Nestle.

The ad giant has snapped up promising smaller advertising companies to expand its reach and revenue stream.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]