BBDO Transfers Ownership of S.African Subsidiary
Aug. 20, 1985
NEW YORK (AP) _ BBDO International Inc., one of the leading U.S. advertising agencies, said Tuesday it had transferred ownership of its South African subsidiary to a local group of five executives.
The company said the main reason for the move was ''recent operating losses in South Africa caused to a large extent by difficult economic conditions in that country.''
''We further believe that the turbulent political situation would not make our investment attractive from a longer term point of view,'' Allen Rosenshine, president and chief executive of BBDO International, said in a news release.
Rosenshine said in a telephone interview that the losses amounted to about 30 cents to 35 cents a share from the fourth quarter of 1984 through the second quarter of 1985.
The transfer will result in a third-quarter write-off that will amount to about 50 cents a share, Rosenshine said. In the third quarter in 1984, BBDO had a profit of about $3.9 million, or 62 cents a share.
The new owner group includes Derrick Dissel, one of the original founders of the South African agency that BBDO acquired in 1974.
The other four owners are Ian Shepherd, Alan Tiley, Grahame Tomes and Pierre Venter. All five have been part of BBDO's management in South Africa and have become equal partners in the new structure, BBDO said.
BBDO will enter into an associate relationship with the agency to maintain an operating presence in South Africa, it said. The relationship will provide the South African group with access to BBDO's worldwide resources and will continue to provide BBDO's multinational clients with marketing and advertising services they need in South Africa.
BBDO ranked sixth among the U.S. agencies with billings of $2.28 billion in 1984. The South African operation had billings of about $99.3 million.