Ad agencies call off merger talks

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The Independent Online
GOLD Greenlees Trott and Young & Rubicam, the advertising agencies, have called off discussions about the possible merger or co-operation between their London businesses, writes Diane Coyle.

GGT shares closed down 20p at 240p. In a statement the agencies blamed the difficulty of arranging a deal that would suit both a public and a private company. Young & Rubicam is one of the few privately owned big international agencies.

A second reason for ending the talks was possible conflicts of interest between the two agencies' client lists. Both parties said that the decision to end talks was amicable.

GGT had reported a 3 per cent rise in profits in the half-year to 31 October, but a strong performance in the US offset a decline in the UK. Access to Young & Rubicam's more extensive international network would have benefited it.

Last summer it formed a joint venture with GGK, a privately- owned European network.

Industry sources said the potential deal had seemed to make sense for both parties.