Foreign-owned business operations faced potential sale due to mounting financial losses, as per Dentsu's considerations.
In a significant move, Japanese advertising major Dentsu is exploring the sale of its international business. The sale, which could be worth several billion dollars, marks the end of Dentsu's decade-long effort to challenge global rivals WPP, Publicis, Interpublic, and Omnicom.
Dentsu's international business includes creative and media units outside Japan, and the sale process is ongoing, with no definitive timeline or buyer announced as of yet. Mitsubishi UFJ Morgan Stanley and Nomura Securities have been hired to assess potential buyers for these units.
The decision to sell comes as Dentsu's global business has been weighed down by various challenges. Shrinking client budgets, intense competition, and disruption from AI-driven marketing tools have taken a toll on the company's growth.
Dentsu's international push began in 2012 with the acquisition of UK-based Aegis Group. This move briefly made Dentsu the world's fifth-largest ad holding company. However, the strategy has not resulted in sustainable growth for the company.
Potential international buyers for Dentsu's creative and media units outside Japan include global advertising and media companies such as Publicis Groupe and WPP, as part of a possible corporate restructuring.
The sale could signal a major shift for Dentsu, a company that has struggled to turn its overseas bets into sustainable growth. If successful, the sale could help Dentsu focus on its core business within Japan and potentially strengthen its position in the domestic market.
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It's important to note that the sale does not include Dentsu's business within Japan. The company continues to operate in its home market, where it remains one of the leading players.
As the sale process unfolds, we will continue to provide updates on this significant development in the advertising industry. Stay tuned for more news and analysis.
