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Dentsu to acquire stake in Lion & Lion parent company Septeni

Dentsu has expressed interest in acquiring a 20.99% stake in media company Septeni Holdings, parent company of agencies such as Malaysia-based Lion & Lion. The deal will give Dentsu an upper limit of the ratio of voting rights of 20.99% in Septeni Holdings, while the latter remains independent. It is valued at around JPY260 per share for 26,895,000 shares, estimated at JPY6.9 billion. Septeni Holdings is currently known for its advertising and manga content business.

In a statement to A+M, a Dentsu spokesperson confirmed that no redundancies or attrition are planned at this time. No management changes are also planned, with Dentsu being second only one statutory auditor to Septeni. It added that Septeni’s content business including its manga business is “not prioritised at this time”, but is in the scope of business alliance with expected synergies. If the tender is satisfied as planned, the deal is expected to conclude within December 2018. If a third-party allotment is required, there will be delays.

According to a document detailing the purpose of the tender, the acquisition comes on the back of Dentsu’s April 2016 establishment of Dentsu Digital Inc, its specialist digital marketing company. Through the move, Dentsu aims to expand its service lines within this business domain centred on digital media.

This is in a bid to “provide systems and foundations (marketing technology)” for solving business issues that exist within clients such as customer relationship management (CRM), marketing automation, and database consulting. In the field of digital media operation, Dentsu is developing data foundations while collaborating to increase competitiveness in order to enhance its strategic development and operational capabilities.

As for Septeni, the move was part of its plans to expand its market share and raise profitability by bolstering the positions it had established in the smartphone advertising and social advertising areas of the domestic market. This also includes future growth plans in overseas markets via a two-track approach that comprises of growth through the establishment of local posts centered around North American and Asian regions and the acquisition new customers (organic growth), and M&A.

“It is in this environment that [Septeni] has been investigating all possible avenues including capital and business alliances with other companies in order to be able to carry out business as an even better marketing partner to its customers,” the statement added.

The document added that an agreement to create a capital relationship to accelerate business collaborate was made in late May 2018. Since then, repeated dialogue had been made on multiple occasions discussing the synergies until it was agreed upon once more in August 2018. Both companies look to improve efficiency and expand business scale. This is specifically into advertising operations (bid management, reporting, and creative management) and reciprocal use of resources and data assets.

In 2016, Septeni acquired Malaysian digital agency Lion & Lion from Nova Founders Capital and management of Lion & Lion. The acquisition was for an undisclosed US dollar double-digit million amount. This saw Septeni supporting the company’s expansion across ASEAN as well as strengthening their head office in Kuala Lumpur, Malaysia. The Lion & Lion management team, including group managing partners Casper Andersen and Hugh Batley, will remain in place.

Marketing has reached out to Lion & Lion for additional details.

Earlier this month, Dentsu Aegis Network acquired Branded, an Asia Pacific live media events company known for producing events such as All That Matters. Following the move, Branded will join lifestyle marketing agency MKTG to scale capabilities in live media events, through the development of new age creative, content and IP ownership in the high growth areas of sport, music, gaming and entertainment.

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