Mitchell to keep hand on the helm after merger

Harold Mitchell. Photo / Supplied

Aussie advertising industry identity Harold Mitchell is expected to maintain his profile after Mitchell Communication Group merges with the international media buying group Aegis.

The larger-than-life adman - who released his autobiography in New Zealand last December - is a 30 per cent shareholder in MCG.

Family interests own a further 10 per cent. The MCG board approved Aegis' merger offer this week and recommended other investors - through the ASX - do the same.

The deal will be a relief for Mitchell Communication shareholders who may have been concerned that executive chairman Harold Mitchell - with his contacts and ties - was ageing and that his eventual departure from the company would limit its value.

He will be chairman of the combined group in Australia and New Zealand and has pledged not to sell 85 per cent of the shares he gets for two years.

The Mitchell family stand to make A$150 million ($187 million).

MCG is the largest media buyer in Australia and has a much smaller share of New Zealand ad spend.

The merger is the latest sign of global consolidation in the ad industry, with more expected. It marks growth for Aegis into the Asia- Pacific region.

Aegis Asia Pacific chief executive Nick Waters said yesterday that Mitchell would continue to have a profile for the merged company.

A powerful player in the Australian ad industry and feted by the Australian media industry, he has mixed with movers and shakers of the media and political scene such as Kerry Packer.

In the merger - by scheme of arrangement - Mitchell will be the second single shareholder for London-based Aegis, with 4 per cent.

Aegis brands include Carat, which is eighth largest player in the Australian market and fifth in New Zealand.

Waters expected that, subject to shareholder approval, the merger would be done by early November.

He said it made sense with category clashes for ad accounts and both firms with a focus on digital.

The merger is the latest in a period of consolidation for the industry over 10 years, he said.

"The future of marketing is a relentless shift away from analogue to digital. The Mitchell brand is extremely strong in Australia and well known here in New Zealand." Waters said.

Aegis chief executive Jerry Buhlmann, appointed to the top job in March, said he would use the deal to build existing Australian operations and a presence in the region.

It's understood no plans have been made on whether to merge any companies within the group. MCG includes flagship media-buying agency Mitchell & Partners, Emitch, Australia's biggest digital media agency, sports signage company Stadia Media and several public relations, social media and technology-based firms.

- additional reporting: The Australian