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Bain Capital acquires WPP's stake in Japan's ADK for $1.35 bn

Martin Sorrell, CEO, WPP
Martin Sorrell, CEO, WPP

After a month-long strong resistance and deliberations, world’s largest advertising agency WPP has arrived at an agreement with American private equity firm Bain Capital to sell its share amounting to 24.7 per cent in Japan's third largest advertising agency Asatsu DK (ADK) for $1.35 billion.

According to a release issued by Bain Capital, the business relations between WPP and ADK terminated with immediate effect, putting a full stop to the two-decade long professional association between the two parties. This has been seen as the first ever major Japanese ad agency buyout. 

Sources close to the development indicate that the decision made by WPP is still unclear as their earlier stance was rooted in not giving up the deal to Bain Capital and had even considered imposition of legal actions to prevent the buyout. They had even rejected Bain Capital’s tender offer as a highly undervalued offer to acquire controlling stakes in ADK. 

However, under the new association, it is being considered to not completely dissolve all financial associations with WPP and let it stay with 25 per cent stake in ADK, thereby making it a non-authoritative entity as a stakeholder. According to the sources, ADK had stated that it was not making enough financial and strategic turnouts under its association with WPP, which had led to the decision regarding the stake sale.

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