GBM, Cohn & Wolfe Six Degrees to remain independent till latter’s earn out is over
Even as the newly formed entity of Burson Cohn & Wolfe announced region wise leadership, the question in India is what will happen to Genesis Burson-Marsteller and Cohn & Wolfe Six Degrees?The merger of the two will make it the largest PR firm in India after Adfactors PR. But will take a while, as Cohn & Wolfe Six Degrees is in the middle of an estimated 4 year earn outafter Cohn & Wolfe acquired Six Degrees in September 2015.
Cohn & Wolfe international spoksesperson told PRmoment India that, " In India, the firms will co-exist separately as Cohn & Wolfe Six Degrees remains on an earn-out."
To find out the implications of what happens during an earn out, PRmoment India spoke to Dev Raman, managing partner, Lastaki Partners who has advised on the Denstu-Perfect Relations merger in September 2016. Raman told PRmoment India that, “ One obvious complication of an earn-out is that you have an independent P and L. That is the complication from a transaction perspective.”
While emphasising that he is not involved in any way with the Burson Cohn & Wolfe merger or with the Cohn and Wolfe acquisition of Six Degrees PR, Raman commented that, “ In an earn-out what is important is who controls the fortunes of the entity. If my earn out is now linked to an entity that is part of a combined P and L, then that becomes complicated."
Observers also told PRmoment India that given the relative size of the India operations of Burson and Cohn & Wolfe in the global scenario, it is very likely that the priority markets for rolling out the the merger will be USA, UK and China.
BCW CEO Donna Imperato while commenting on the setting up of the regional leadership team said, “This is a powerful leadership team that will drive integration and growth at Burson Cohn & Wolfe and lead BCW on our mission to become the best integrated communications agency in the world,” said Imperato. “They each have proven track records in leading strong regions, teams and clients, are deeply respected in their markets, and bring the right integrated expertise and mindset to the roles – the mindset needed to complete a seamless merger and continue pushing the boundaries of integrated communications.”
Reacting to the merger at the global level, Adfactors PR managing director, Madan Bahal, said that, “ It’s a good development and it proves that an agile, energetic leadership will always be crowned with responsibility.” Bahal added that the combined strength of Burson-Marsteller and Cohn & Wolfe, will make Burson Cohn & Wolfe a part of the trio of top PR firms in the world along with Edelman and Weber Shandwick.”
Bahal also pointed out that this merger may be a pre-cursor to further consolidation of large network owned PR firms.
Nitin Mantri, president, PRCAI and director Avian Media said that, “The development will create better competition and actually help independent firms to shine.”