Dentsu weighs sale of international business; taps banks for options

Dentsu has engaged Mitsubishi UFJ Morgan Stanley and Nomura Securities to evaluate potential interest in its global creative and media operations, according to a report in the Financial Times. 

The Japanese advertising major is weighing possibilities that include selling a minority holding or even divesting the international arm entirely.

Bold restructuring

The overseas business, which took shape after Dentsu’s 2012 acquisition of Aegis and was later consolidated under the Dentsu brand in 2020, also houses US-based digital marketing consultancy Merkle. Sources told FT that while no final decision has been reached, Dentsu is aiming to put a concrete plan in place before the end of this year.

Responding to analyst questions after the company’s recent earnings announced on August 15, CEO Hiroshi Igarsashi acknowledged that a sale was not off the table. 

“We have been talking about the rebuilding of our international business and working on enhancing our competitiveness according to our Mid-Term Management Plan. We have also mentioned the rebuilding our business foundation and reevaluating our underperforming businesses are making a steady progress,” Igarsashi said. 

He also mentioned that these initiatives were being pursued in line with the company’s broader restructuring efforts, with steady progress reported on both rebuilding the foundation and addressing underperforming segments.

Take this quote and add the following para in passive voice: “In that regard, we are currently conducting discussions with external advisors who bring specialized expertise in this area. We will consider options to accelerate business restructuring through partnerships with third parties if it will help us achieve an earlier recovery,” he added. 

Igarsashi clearly stated that regarding a potential sale of the international business, no clear response could be provided at this stage, and no specific details were available for discussion. 

Partnerships were described as potentially involving the acceptance of external capital for underperforming businesses or the outsourcing of non–client-facing functions.

Once any decisions are finalized, they will be disclosed and announced promptly, Igarsashi mentioned to analysts.