Sam Balsara, the owner of Madison Media, the only major Indian ad agency that doesn’t still have a foreign partner, is negotiating with Japanese advertising behemoth Dentsu and WPP for its sale. According to sources close to Balsara, he is looking at a competitive bidding process to get the highest possible price.
“Our position on this subject continues to be the same as it has been for the last decade and a half: that we are open to evaluating bringing in a joint venture partner provided what the partner can bring in can strengthen or benefit Madison’s clients, employees and shareholders – in that order,” said Balsara.
An email sent to Martin Sorrell, CEO, WPP, did not receive a response. Rohit Ohri, chairman of Dentsu India, said: “No M&A consulting firm has approached us on behalf of Madison Media.”Madison Media is today the largest independent media agency in the Indian marketing communications space, with 11.2% market share, handling advertising volumes worth $630 million, according to 2011 figures from RECMA, an international research company that evaluates media agencies worldwide. Its clients include Cadbury, AirtelBSE -0.84 % and General Motors.
Insiders say that Balsara’s decision to sell out might have been triggered by an illness he suffered a few months ago, which made him realise the need to slow down. The year-on-year growth in billings for Madison has also slowed down slightly, with not much new business coming in, and industry insiders say a few accounts are on shaky ground.
There has also been disruption in the agency’s professional management, with long-time CEO Punitha Arumugam moving to Google in April 2012. He was replaced by Gautam Kiyawat, who was formerly with Research In Motion.
However, there is no denying that for any international communications conglomerate that is serious about the Indian market, Madison Media would be a trophy acquisition. It has a client portfolio value second only to WPP’s Mindshare and a blue-chip portfolio of long-time clients. Dentsu is currently ramping up its position in the Indian market.
Source: indiatimes.com