Advertising agencies Y&R Israel and Shimoni Finkelstein Barki are negotiating a potential merger, sources informed “Globes”. If the talks succeed, the merger willcreate one of the ten largest agencies in the country. At this stage, the parties have yet to decide the merger model.
Y&R Israel is fully-owned by Y&R, which belongs to the Interpublic Group. Shimoni Finkelstein Barki previously sold shares to FCB, an Interpublic agency.
The fact the two agencies were owned by two separate advertising groups mighthave become aproblem, but sources told “Globes” that David Shimoni, one of thefirm's owners,bought back the shares held by the international agency; Shimoni currently holds full ownership of the firm. Since the two agencies are wholly-owned byindividual entities, the deal should be easier to close.
According to figures from the Ifat Group, Y&R Israel’s advertising campaigns reached NIS 60 million in 2014, placing them16th on the biggest advertiser list. The agencyfinished the first half of the current year with NIS 27.8 million.
Shimoni Finkelstein Barki does not make the top 20 list. According to market estimates, the firm managed to drum up NIS 50 million worth of business in 2014.
The two agencies have few potential conflicts among their client lists, meaning the unified company would maintain the majority of its predecessors’ operations.
Previous attempts
This is not the first time Y&R Israel has tried a strategic merger toboost its growth rate. In its current format, the agency was built on the foundations of the remains of Shalmor Avnon Amichay whose crash was one of the worst in Israeli history.
After several bumps mainly managerial a new leadership team was formed with Adam Avnon and Guy Bar. The agency stabilized, rehabilitated its image, and managed to grow 8% over the past year.
Unlike other advertising agencies of its size, Y&R Israel has thehistory, DNA, andhuman capital of a largefirm as well as international owners which is probably the motive behind making another significantleap forward.
Advanced talks were once held with Drori Shlomi Advertising, but the deal fell apart and thatfirm merged with another firm. Y&R Israel also looked into a potential merger with JWT from WPP but the move did not receive the blessing of CEO Martin Sorrell.
Shimoni Finkelstein Barki has also had its ups and downs over the past few years, which included one short episode in which it appeared the agency would make a massive leap right after creative and strategy expert Kobi Barki joined. Barki was able to bring the agency several trophies at the Cannes advertising awards but the victories did not lead to a bump in figures and the creative heights were not reached again.
In the past year, the agency suffered a crisis after Fogel Ogilvy, for which Shimoni was acting as a media buyer,was hit by financial trouble and left the firm with an outstanding debt of NIS 5 million. However, the daily operations of the office were successful in the period, during which it recruited new accounts for clients likeiDigital, and Hertz.
The parties declined to comment on the report.
Published by Globes [online], Israel business news - www.globes-online.com - on November 29, 2015
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