A week after Havas’ board approves Bollore’s bid to buy a controlling stake, Cheil is buying a stake in Iris Worldwide, with a view to acquiring all of it.
South Korean agency group, Cheil Worldwide was founded in 1973 by the owner of Samsung, Lee Byung-chul, and initially functioned as a house agency for the group. Samsung was its major client for a long time and still owns 18% of the network. Cheil began to expand internationally, acquiring part or all of other agencies that had Samsung as a client. In 2012, it bought US agency McKinney and last year it increased its stake in London agency, Beattie McGuinness Bungay to 75%. Earlier this year, Cheil lost a small piece of Samsung’s below-the-line business to Iris.
Cheil also owns 100% of US digital agency, The Barbarian Group, and formed the Cheil Greater China in 2012 after buying Bravo Asia, which has offices in Shanghai and Hong Kong.
Iris’ 2013 revenue was estimated to be AU$94.8 million. Its clients include Samsung, Reckitt Benckiser, Shell, Adidas, Barclaycard, Domino’s and Diageo. Cheil’s statement noted that it is making “a significant initial investment” that “will potentially rise to 100% of the business over the next five years”. As part of the deal, U.S. publisher Meredith Corp. is relinquishing the minority stake in Iris that it acquired in 2011. Iris’ network has 17 offices in North and South America, Europe and Asia that will continue to operate under the Iris brand.
Cheil is the world’s 15th biggest agency company, with 2013 revenue of AU$813.1 million worldwide, up 16% from the previous year despite a 17.2% dip in revenue in the US.
Ian Millner, joint chief executive at Iris, stated, “We’re about to enter the most exciting chapter for Iris. This partnership won’t change who we are or what we do as a creative innovation network – but will extend our global reach and capabilities, and enable our clients and people to benefit from the huge opportunity presented by a true ‘east meets west’ and ‘west meets east’ network.
“On the world-stage Iris is still pretty small and in the Aussie market there are some pretty powerful network agencies who are able to leverage the benefits of the network to make them really competitive in the market. That’s generally true right across the world. One of the things that got us excited about the Cheil opportunity is, we both have an ambition to change the world order, we both have an ambition to be more competitive, more interesting and do things that very large holding companies that lead the market can’t.”
Daiki Lim, president and chief executive at Cheil Worldwide, added, “Our goal was to find the right partner who could match our determination and drive. We’ve watched with awe how Iris has built its global business and we are delighted to have this opportunity to work with their brand.”
