Monday, 28th July 2008
Interesting moves in the market-research arena: in June, German GfK (Gesellschaft für Konsumforschung) and British TNS (Taylor Nelson Sofres) thought of a merger of equals, eventually becoming the second largest player just behind market leader Nielsen Company, USA. Everything seemed to be settled, as British media house WPP entered the scene with a hostile takeover bid for TNS. GfK reacted and changed plans from merging with TNS to also taking over TNS. The merger of equals should have taken place this autumn. According to GfK and TNS, they have 24,000 employees worldwide in 111 countries providing the largest network for consumer surveys. They analyze the behavior of consumers worldwide, e.g. from cell phone use in China to TV audience rating in Germany. The market size is estimated with approximately US $ 25 billion per year.
GfK (9,300 employees, EUR 1.16 billion revenues), currently the number five in market research worldwide, would like to take over, TNS (EUR 1.3 billion revenues) currently the number three, forming the second largest market research company in the world. A combined company would have had its headquarter in Nuernberg, Germany.
The reason for WPP to bid for TNS is obvious: its subsidiary Kantar provides market research. A merger between Kantar and TNS would also form the second largest player in the market and diminish WPP's dependency on the cyclical advertising market. WPP has addressed its offer to TNS’ shareholders and is backed by hedge-fonds, which own approximately 20% of TNS; in contrast, the intended merger between GfK and TNS would have had no premium for shareholders and both companies’ shareholders would have owned 50% each of the new comany . But, the battle is still on-going, the General Meeting of TNS has been adjourned indefinitely, and an offer from GfK has yet not been made. What is clear is that there is a consolidation process in the market research arena and more and more M&A activities will shake the industry in the near future.
Joint website of GfK and TNS: http://www.gfktns-merger.com
Gfk homepage: http://www.gfk.com
TNS homepage: http://www.tnsglobal.com
WPP homepage: http://www.wpp.co.uk
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