Dentsu Ready to Buy British Media Giant Aegis

August 20, 2012

Unlocking Word Meanings
Read the following words/expressions found in today’s article.

1. poised (adj.) 
[poizd] – ready and prepared to do something
Example: After years of training, the company president’s son was poised to take on his father’s role.

2. acquire (v.) [uh-kwahyuhr] – to get; [in business] to buy another company
Example: Facebook recently acquired the photo-sharing company, Instagram.

3. extensive (adj.) [ik-sten-siv] – covering a large area
Example: The marketing of Samsung’s products was so extensive that it reached the European, North American, and Asian market.

4. shrink (v.) [shringk] – to become smaller in value or size
Example: The market for designer brands shrinks in a poor economy because buyers spend less money.

5. approach (v.) [uh-prohch– to start talking with someone in order to make a deal, suggestion or request
Example:  The game developer approached a major software company with an idea for a new computer game.

Read the text below.

Japan’s advertising giant, Dentsu, is poised to buy Aegis, one of the biggest European media companies.

The Japanese ad giant is so interested in acquiring Aegis that it is willing to pay 3.2 billion pounds ($5 billion), a price that is 20 times what Aegis is expected to earn in 2012.

Dentsu’s offer is high, but the company is hoping Aegis’ extensive international reach will help build up its shrinking local market. Although Dentsu leads the Japanese ad industry, the growth of the entire ad industry in Japan has shrunk with almost 6% loss in the last decade.

Analysts say that the two companies are a perfect fit and that the deal is proof that the advertising sector is still a valuable investment despite the tough economic situation in Europe.

Aegis is the leader in digital marketing and has big clients such as Disney, Coca-Cola, and General Motors. The British company has also been performing well in the US and the Asia Pacific region. In 2011, Aegis’ income from the digital communications sector increased by a record-breaking thirty-five percent.

Dentsu’s CEO, Tadashi Ishii, believes that together, Dentsu and Aegis will lead in the Asia Pacific region, enjoy a strong presence across Europe and have fast growth in the US.

Jerry Buhlmann, CEO of Aegis, says Aegis agreed to the deal because Dentsu approached them sincerely and gave an offer in cash.

The buying of Aegis places Japan second to the US as the most active acquirer of overseas companies this year.

Viewpoint Discussion
Enjoy a discussion with your tutor. 

Discussion A

·         What benefits can a company get from acquiring foreign businesses?
·         Why do you think Japanese companies are active in buying foreign companies recently?

Discussion B

·         What is your opinion regarding Japanese companies’ performance in the world market?
·         Think of at least one large Japanese company that is internationally known. Why do you think that company has become so successful?

August 20, 2012