Merger boosts Bates' standing

By DITA DE BONI

The Bates Palace has plugged the gap left by departed chief executive Noel Browne with the addition of an extra agency.

It will absorb Parnell agency Generator, with Generator managing director Andrew Stone becoming chief executive officer of the newly named Generator Bates on October 2.

Bates' media buying division, Media Palace, will retain its moniker, while the PR arm, 141 Palace Plus, becomes 141 New Zealand.

The price paid for Generator has not been disclosed, but the combined agency will rank in New Zealand's top three, says Ian Elliot, chairman of Bates Palace parent company The Communications Group.

Generator has never disclosed its billings, but AdMedia puts Bates' billings for the last financial year at $57 million.

Mr Elliot confirmed that Bates had not doubled its business with the takeover.

It is thought that Generator Bates will have combined billings of up to $100 million, placing it behind second-ranked agency Colenso BBDO with $126.8 million.

Generator Bates will be fully owned by Australia's Communications Group, a firm that has billings of $A1.3 billion ($1.7 billion), which in turn belongs to British-listed Cordiant Communications Group.

Mr Stone will join the board of the Australian parent company.

The big fallout from the merger is DB Breweries, which has lost Generator as an agency over a conflict of interest with the Carlton & United Breweries (Foster's) account, which the Bates companies have held for over 30 years.

"In a business sense and in every other way, this merger is perfect, and in the client sense, almost perfect," Mr Stone said.

Generator brings clients such as Sony, Red Bull, and Mercury Energy.

Bates holds accounts for clients that include Arnotts, Woolworths Online, Nokia and Daewoo.

There would be "no call" on possible redundancies at this stage, although operations would be reviewed later.