The President & Global CEO of Dentsu Group has released an official statement to clarify the company’s position following media reports about a potential shake-up of its overseas business.
In a statement, Hiroshi Igarashi stressed that “no official announcements have been made by the company” and said Dentsu remains focused on “rebuilding the foundation of its international business while conducting a re-evaluation of underperforming business.”
“At the same time, the Company is exploring strategic alternatives to enhance corporate value, but no decision has been made at this time,” he added.
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He also pledged that should any developments arise requiring disclosure, Dentsu would update “in a timely and appropriate manner.”
The clarification follows widespread speculation earlier this month after the Financial Times reported that the Japanese advertising giant is exploring a possible sale of its international operations – a move that could unwind a decade-long push to compete with the likes of WPP, Publicis, Interpublic and Omnicom.
According to the FT, Dentsu has appointed Mitsubishi UFJ Morgan Stanley and Nomura Securities to gauge buyer interest in its creative and media businesses outside Japan. Any sale could be worth several billion dollars and would represent a dramatic reversal of strategy.
Dentsu’s international footprint was built on big-ticket acquisitions, most notably its £3.2bn purchase of Aegis Group in 2012 – then one of the largest deals in the sector – followed by US-based Merkle and London’s Tag Group.
The group has a sizeable presence in the UK, with Manchester a key hub. Its city offices house hundreds of staff across media, creative and CXM, and the city has been central to the integration of brands such as Carat, iProspect and Merkle. Dentsu has also played a prominent role in the North West agency scene, partnering with major retail and ecommerce clients.
But the international arm has struggled. Last year it generated more than $4.5bn in net revenues, yet remained unprofitable. The group has already cut 3,400 jobs in a restructure and lowered its full-year outlook, forecasting an operating loss of ¥3.5bn ($24m) instead of a ¥66bn profit.
Igarashi has previously admitted that the “international business continues to face negative growth across all regions.”
Sources told the FT that management has grown frustrated with the lossmaking global division, which has weighed on its domestic strength. Analysts also point to intensifying competition and disruption from artificial intelligence, as rivals pour investment into AI-driven adtech.
Potential suitors for Dentsu’s international business could include rival agency groups and private equity investors, though the company has insisted no decision has been taken.
