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Publicis Groupe to Acquire Microsoft's Razorfish in $530 Million Deal

Strategic Insights

— 1 min read

Publicis Groupe SA is set to boost its share of web advertising by acquiring Microsoft Corp.'s digital advertising firm Razorfish for a combined value of $530 million. The acquisition will see Publicis Group purchase ad dollars over a five-year term across Microsoft's digital properties, while Razorfish will continue to operate under its brand name and be part of VivaKi, the new Publicis Groupe entity. The deal is expected to close during the fourth quarter of 2009, with about 25 per cent of the company's annual revenue coming from digital communications.

Key Takeaways:

  • Publicis Groupe SA has agreed to buy Microsoft Corp.'s digital advertising firm Razorfish for $530 million (U.S.) in a combination of cash and 6.5 million Publicis Groupe treasury shares.
  • The acquisition aims to boost Publicis Groupe's share of web advertising, with clients including Ford Motor Co., Best Buy Co., and McDonald's Corp.
  • Razorfish will continue to operate under its brand name and be part of VivaKi, the new Publicis Groupe entity created in June 2008.
  • The deal is expected to close during the fourth quarter of 2009, with about 25 per cent of the company's annual revenue coming from digital communications.
  • Publicis Groupe is the world's fourth-largest communications company with ad agencies including Leo Burnett and Saatchi&Saatchi.
  • The acquisition will see Publicis Groupe purchase ad dollars over a five-year term across Microsoft's digital properties.

Statistics:

  • The transaction is valued at $530 million (U.S.).
  • Publicis Groupe will provide funds in a combination of cash and 6.5 million Publicis Groupe treasury shares.
  • 25 per cent of Razorfish's annual revenue will come from digital communications.
  • The acquisition is expected to close during the fourth quarter of 2009.

Sources:

  • "Publicis to buy Razorfish for $530 million", The New York Times, [reference missing]
  • Joint statement released by Publicis Groupe SA and Microsoft Corp. [reference missing]

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