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Cheil Worldwide Spends $50M to Go Global

Cheil World­wide solid­i­fied its glob­al pres­ence in the adver­tis­ing world with the $50 mil­lion pur­chase of North Car­oli­na-based McK­in­ney. Accord­ing to Tanz­i­na Vega of the New York Times, McK­in­ney will keep its name, but with the pur­chase, the suc­cess­ful adver­tis­ing com­pa­ny becomes part of Cheil Amer­i­c­as. The New York Times quot­ed from an e‑mail state­ment from Cheil World­wide chief exec­u­tive, Nack-Hoi Kim. The pur­chase rep­re­sents the begin­ning of the “next chap­ter in the com­pa­ny’s trans­for­ma­tion into a glob­al net­work made of the best local ad agencies.”

Cheil Seek­ing to Bol­ster US Presence

Mr. Kim con­tin­ued the e‑mail by explain­ing that “McK­in­ney is one of the best adver­tis­ing agen­cies in the world’s largest adver­tis­ing mar­ket. Their high­ly cre­ative, inte­grat­ed approach is rec­og­nized as the most effec­tive in the world.” McK­in­ney was for­mer­ly part of Havas, anoth­er glob­al adver­tis­ing hold­ing com­pa­ny, until 2008 when it bought itself back. Cheil was for­mer­ly owned by Sam­sung and has strug­gled to cre­ate a sol­id, vis­i­ble pres­ence in the Unit­ed States.

Two Prize-Win­ning Adver­tis­ing Com­pa­nies Come Together

If McK­in­ney was­n’t well-known to Amer­i­cans, all of that changed in April of 2012 when the com­pa­ny went up against Cul­ver City, Cal­i­for­nia-based WDCW LA (Wong Doo­dy Cran­dall, Wiener,) on the AMC (Amer­i­can Movie Clas­sics,) tele­vi­sion show, The Pitch. McK­in­ney won the com­pe­ti­tion and cre­at­ed the best adver­tis­ing cam­paign for Sub­way® restau­rants break­fast sand­wich­es. Cheil World­wide was also suc­cess­ful in win­ning the Media Grand Prix award at the Cannes Awards in June of 2011. As Brad W. Brine­gar, McK­in­ney’s chair­man and chief exec­u­tive observed, “who would ever have thought a glob­al net­work would lead out of Durham, North Car­oli­na, and who would have thought that a Seoul agency would have been the dom­i­nant force at the Cannes awards.?”

Cheil Approached McKinney

Cheil glob­al chief oper­at­ing offi­cer, Michael Kim may unknow­ing­ly have hint­ed at the future when he pre­dict­ed that 2012 would be a “trans­for­ma­tive year” in a Decem­ber 2011 inter­view with the New York Times. In dis­cussing the merg­er, Brine­gar explained the rea­son­ing behind Cheil’s desire to pur­chase McK­in­ney. He said, “Cheil came to us seek­ing a part­ner to com­plete their glob­al net­work. They have the resources to help us devel­op some of the capa­bil­i­ties that would have tak­en us longer to devel­op had we remained independent.”

Cheil Amer­i­c­as pres­i­dent and chief exec­u­tive, Buz Sawyer explained, how­ev­er, that McK­in­ney would “retain its inde­pen­dent spir­it.” He went on to clar­i­ty that “Cheil is not a hold­ing com­pa­ny. Cheil is an adver­tis­ing agency.”

The take over brings togeth­er two dom­i­nant play­ers in glob­al adver­tis­ing. McK­in­ney will help Cheil increase and expand its pres­ence in the Unit­ed States, while Cheil World­wide will pro­vide McK­in­ney with the resources that it needs to grow.

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