Publicis Groupe to Expand Further in China: Acquires Majority Stake in Yong Yang, Leading Marketing Services Group

PARIS, April 2, 2007 – Publicis Groupe announced today the acquisition of a majority stake in Chengdu-based Yong Yang, a leader in field force logistics and retail and promotional marketing. The transaction, subject to Chinese regulatory approval, illustrates Publicis Groupe’s strategic commitment to expand and deepen its marketing services operations in the fast-growing Chinese market and across Asia. Last year, the Groupe acquired control of Shanghai-based Betterway Marketing Solutions, one of China’s largest and most innovative full-range marketing services agencies. Publicis Groupe currently has over 2,500 employees across China, at 79 offices in 33 cities.

Yong Yang, founded in 1995, has in-depth knowledge of China’s regional urban markets, particularly those deep in the Chinese heartland. With 29 offices across China, Yong Yang is the only marketing services company with a substantial presence in Chengdu, the rapidly-growing capital of Sichuan province. The agency’s key clients include Budweiser, Wliansheng Liquor, Marlboro and Sony Ericsson.

When the transaction is completed, Yong Yang will be aligned with Arc, part of Leo Burnett Greater China. Leo Burnett Greater China has five main offices in Taipei, Hong Kong, Guangzhou, Shanghai and Beijing with close to 700 employees. Arc’s key Greater China clients include global brand owners P&G, Wrigley and McDonalds.

“China continues to be of absolutely critical importance to Publicis Groupe,” said Maurice Lévy, Chairman and CEO of Publicis Groupe. “We are already meeting the increasing demands of advertisers with an incredibly strong grass-roots offering across China. I am delighted to welcome the Yong Yang teams, who will make that offer even stronger.”

Michael Wood, CEO, Leo Burnett and Arc Greater China, said: “Joining forces with Yong Yang allows Leo Burnett China to further build Arc’s presence in Greater China, providing a strong geographical foot print in the Chinese market. This partnership brings new areas of expertise to the table, allowing us to fuse Arc and Leo Burnett’s international status and knowledge to Yong Yang, while they add their 10 years of expertise in grass roots China to our offering. It’s a ‘win win’ situation for our clients. Yong Yang brings an unrivalled wealth of experience both provincially and in key growth cities. ”

Ms Zhao, General Manager of Yong Yang, adds: “We are very pleased that our already strong working relationship with Arc & Leo Burnett has now become a formal partnership. We believe that our companies complement each other both culturally and in how we think. Arc and Yong Yang can only go from strength to strength and we look forward to the opportunities ahead”.

Simon Holt, Managing Director of Arc Greater China, added: “Yong Yang is a hugely professional operation with whom we have worked regularly, prior to this acquisition. Their local production runs like clockwork - and they deliver. The Yong Yang teams have worked consistently over the years to build a strong reputation plus an impressive client list. They have also created positive relationships with local and national government – very important in the fast developing China market. Like all good acquisitions, mutual benefit is at the heart of the deal and our clients can only be happy about that”.

Yong Yang will retain its name under the acquisition, and management will be led by Simon Holt (Managing Director Arc Greater China) and Patrick Lai, currently Head of Strategic Planning for Arc Greater China. Patrick Lai will now assume the post of Management Supervisor, while Michael Wood will oversee as CEO of Leo Burnett & Arc Greater China. Yong Yang’s current Management, Ms Zhao (General Manager) and Mr Zhang (Deputy General Manager) will continue in their current roles.

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Yong Yang: Yong Yang is a leading expert in field force logistics, retail and promotional marketing and activation origination, management and production.

- 18 wholly owned offices and 11 affiliated offices across Greater China

- Wholly owned: Hangzhou, Wenzhou, Nanjing, Hefei, Shanghai, Zhengzhou, Wuhan Guangzhou, Fushan, Shunde, Zhongshan, Dongwan, Shengzhen, Nanning, Guiyang, Chengdu, Kunming, Changsha

- Number of full time employees: 120 - 1200 temporary staff

Leo Burnett Worldwide: Founded in Chicago in 1935, Leo Burnett Worldwide, comprising the Leo Burnett brand agency and marketing partner Arc Worldwide, is one of the world’s largest agency networks and a wholly owned subsidiary of Publicis Groupe, the world's fourth largest communications group.

With expertise in mass advertising and digital, promotional and retail marketing, LBW partners with blue-chip clients such as The Coca-Cola Company, Diageo, McDonald’s and Procter & Gamble, Heinz, Kellogg’s.

The company has won more advertising awards for campaign effectiveness than any other agency in the last five years.

Publicis Groupe (Euronext Paris: FR0000130577 and NYSE: PUB) is the world’s fourth largest communications group, as well as world’s second largest media counsel and buying group. With activities spanning 104 countries on five continents, the Groupe employs approximately 40,000 professionals.

The Groupe’s communication activities cover advertising, through three autonomous global advertising networks: Leo Burnett, Publicis, Saatchi & Saatchi, as well as through its two multi-hub networks Fallon Worldwide and 49%-owned Bartle Bogle Hegarty; media consultancy and buying through two worldwide networks ZenithOptimedia and Starcom MediaVest Group; and marketing services and specialized communications including direct marketing, public relations, corporate and financial communications, event communications, multicultural and healthcare communications.

Web sites: www.publicisgroupe.com and www.finance.publicisgroupe.com

Contacts:
Publicis Groupe:
Eve Magnant, Corporate Communications + 33 (0) 1 44 43 70 25
Leo Burnett Greater China:
Jeani Rodgers, PR Director + 852 9261 6019

Posted: April 2007


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