Management buyout at Lowe Switzerland?
Lowe Worldwide plans to drastically reduce its agency portfolio. According to CEO Curdin Janett, the Swiss agency McCann Erickson—which, like Lowe, is part of the Interpublic Group—is not facing the same pressures.
Lowe Worldwide wants to drastically reduce its membership base. According to the industry service Persoenlich.com, 47 of the 83 agencies are to be shed. In total, Lowe Worldwide, which belongs to the Interpublic Group, will retain just 36 agencies. This includes six subsidiaries in which the network has a minority shareholding and a further ten in which other Interpublic Group agencies have a stake. Lowe Switzerland is also affected by the downsizing. According to Persoenlich.com, agency head Kurt Schmid is currently negotiating with Interpublic. Schmid has received an offer to buy the agency alone or together with other partners as part of a management buyout. Lowe Worldwide currently holds a 92 percent stake in the Swiss subsidiary. Whether the agency will also be given a new name in the event of a takeover is currently unclear. According to Schmid, the option of a management buyout would eliminate the high fees that the Swiss subsidiary has to transfer to the parent company every year. In addition, as a subsidiary of an agency listed on the New York Stock Exchange, Lowe Switzerland is subject to US law. All sales and earnings figures are strictly monitored from the USA, which means less flexibility for the agency. In addition to a management buyout, it is being discussed whether the Interpublic Group will reduce its current shareholding to a minority stake. According to Persoenlich.com, the parent company has given Schmid until the end of July to decide on one of the alternatives.
According to CEO Curdin Janett, the Swiss agency McCann Erickson, which is also part of the Interpublic Group, is not under the same pressure as Lowe. "The various members of IPG are being treated completely separately," he told Werbewoche. The pressure to cut costs at Lowe is therefore not automatically spilling over to McCann. Of course, the agency based in Geneva and Zurich also has to meet the requirements of the parent company, but these are absolutely within the bounds of what is feasible and comparable with the objectives of any healthy Swiss agency. The services to be provided to the international McCann Worldgroup network also have an impact. "But what counts most is what we get in return: We are very satisfied with what we get in return, be it in terms of people who support us, tools or help with international pitches," says Janett. It is a healthy relationship. Accordingly, Janett has no desire to remove his agency from the network.
According to CEO Curdin Janett, the Swiss agency McCann Erickson, which is also part of the Interpublic Group, is not under the same pressure as Lowe. "The various members of IPG are being treated completely separately," he told Werbewoche. The pressure to cut costs at Lowe is therefore not automatically spilling over to McCann. Of course, the agency based in Geneva and Zurich also has to meet the requirements of the parent company, but these are absolutely within the bounds of what is feasible and comparable with the objectives of any healthy Swiss agency. The services to be provided to the international McCann Worldgroup network also have an impact. "But what counts most is what we get in return: We are very satisfied with what we get in return, be it in terms of people who support us, tools or help with international pitches," says Janett. It is a healthy relationship. Accordingly, Janett has no desire to remove his agency from the network.
