Cheil Acquires Stake in Beattie McGuinness Bungay

Korea's biggest agency network, Cheil Worldwide, bought a 49% stake in London agency Beattie McGuinness Bungay today in a first step toward creating a micro-network that will open in New York next year. The goal for Cheil, Samsung Electronics' Seoul-based in-house ad agency, is to consolidate its role with Samsung as well as start building its own international business apart from its largest client.

"We want to provide Samsung with top-level strategic and creative ability and decided a quick route to do that would be through [an] acquisition," said Bruce Haines, Cheil's global chief operating officer. "We wanted to partner with an agency with a client base that didn't conflict with our own, so we can work with them in London."

Cheil hired Mr. Haines, a U.K. native and former CEO of Leo Burnett Worldwide in London, as its first non-Korean global chief operating officer a year ago. Cheil has 1,500 staffers and is the world's No. 16 ad agency, according to Ad Age figures, but is still perceived as a one-client agency even though Samsung now owns only 15% of it. And Cheil often has an uneasy relationship with other agencies Samsung chooses to work with around the world. Signaling its ambition to become a top 10 global network by 2012, the agency recently changed its name to Cheil Worldwide from Cheil Communications, but the agency's staffers still use Samsung e-mail addresses.

Cheil's priorities
Beattie McGuinness Bungay is headed by flamboyant U.K. creative Trevor Beattie, who founded the London agency in 2005 with two other executives from TBWA, where he was U.K. chairman and creative director. The partners have been shopping the agency around, and almost closed a deal earlier this fall to sell to TBWA in a merger with that network's London office. The agency, a successful new-business winner, works for Diageo, Ikea, ING Direct and Unilever's Walls division.

Mr. Beattie, who was on a plane back from Seoul today after signing the partnership agreement with Cheil, could not be reached for comment.

"The first priority will be to establish our working relationship in London," Mr. Haines said. "The second is to open in the New York market. The third office will probably be Singapore, which is an important market for us. We have a regional headquarters in Singapore looking after Southeast Asia."



New emphasis
The international development of the Beattie McGuinness Bungay brand will depend on how successful the planned micro-network is with Cheil and winning other clients. The rollout doesn't include China, where Mr. Haines said Cheil will grow under its own name.

"There is a new emphasis in the company now," Mr. Haines said. "The global division is now probably home to a lot more international talent. English is our working language in Korea and elsewhere in our network. There is a lot more sharing of resources and creativity between our offices, which are now staffed more local with local talent and less with ex-pat Korean talent, especially in creative and strategic roles. The plan [with my appointment] was always to grow Cheil Worldwide into a global company, not just to export a Korean management style into new markets."