Japanese advertising giant Dentsu will buy London-based Aegis, the world’s largest media independent, for $4.9 billion.
Aegis is the owner of the well-known U.S. media agency Carat. Carat’s biggest account may be the $3 billion global planning and buying assignment it has from car giant General Motors.
Dentsu, in Japan, has long been the agency of GM rival Toyota.
"The price Dentsu pays values Aegis at about 12 times the company’s earnings before interest, taxes, depreciation and amortization," writes Bloomberg Businessweek, adding, "Global advertising deals in the past three years fetched a median multiple of 8.7 times earnings, according to Bloomberg data.
"The purchase is the second-biggest overseas takeover by a Japanese company this year, Bloomberg data show. Overseas acquisitions jumped to a record $86.5 billion last year. So far in 2012, Japanese companies have made $37 billion of cross- border deals."
The Bloomberg story adds, "The transaction, the biggest in Dentsu’s history, would create one of the largest ad firms to compete with the likes of WPP and Omnicom Group Inc."