Dentsu reviews international business, no decision made on sale

Japanese advertising group Dentsu said it is reviewing its overseas operations but denied media reports suggesting a decision has been made to sell the business.

The official statement was released in response to media outlets on Friday reporting that the agency is exploring the sale of its international business, a move that would end its global competition ambition against notable global advertising groups.

“There have been media reports concerning the company’s international business, but no announcements have been made by the Company,” Dentsu said in an official statement. It added that it is ‘rebuilding the business foundation and reevaluating underperforming businesses,’ while also ‘exploring strategic alternatives to enhance corporate value.’ The agency said no decision has been taken and that any disclosures would be made ‘in a timely and appropriate manner.’

Earlier, the agency had reportedly appointed Mitsubishi UFJ Morgan Stanley and Nomura Securities to sound out potential buyers for its international creative and media advertising arm, which generated more than $4.5 billion in net revenue last year. According to the media reports, options under consideration include selling a minority stake or the entire business, quoting people familiar with the matter.

The agency has struggled to build its global presence despite acquiring UK-based Aegis in 2012 and later adding US consultancy Merkle and London’s Tag Group. This month, it cut its annual forecast, projecting an operating loss of ¥ 3.5 billion and a net loss of ¥ 75.4 billion and announced plans to cut more than 3,400 jobs overseas.