Publicis Groupe buys Razorfish from Microsoft

In a transaction valued at $530 million, Publicis hopes to bolster its digital offering with the addition of the global interactive shop.

Publicis Groupe SA announced yesterday that it has acquired global interactive agency Razorfish from Microsoft Corporation, in a transaction valued at $530 million, to be paid in a combination of cash and 6.5 million Publicis Treasury shares. The agreement also reaffirms the strategic alliance between the two giants announced in June and will allow Publicis’ media clients to purchase display and search advertising from Microsoft on ‘favourable terms, in exchange for certain minimum guaranteed aggregate purchase levels,’ according to a release.

‘More than anything, this acquisition should demonstrate that Publicis Groupe now presents a wider pool of resources, talent, and expertise that will help our clients market their products or services in a way that takes maximum advantage of the new digital world,’ says Maurice Lévy, chairman and CEO of Publicis Groupe, in the release. He adds that about a quarter of Publicis’ annual revenues come from digital communications, and ‘we believe we have more capacity to grow with new clients.’ Reuters has reported that Paris-based Publicis beat Britain’s WPP Plc and Japan’s Dentsu in the final bidding for Razorfish, which Microsoft has owned since 2007.

Razorfish has offices in the US, Europe and Asia, and the company’s portfolio includes clients like Best Buy, Ford and McDonald’s. Its management team will remain unchanged and the company will operate under the VivaKi entity (Digitas, Starcom MediaVest Group, Denuo, ZenithOptimedia). Razorfish CEO Bob Lord says the Publicis partnership is an opportunity to expand its global reach and services.

Razorfish will continue to work on Microsoft’s digital strategy, creative and experimental marketing services, and the five-year agreement includes a commitment by Microsoft to spend a minimum amount for those services each year. The transaction is expected to close during the fourth quarter of 2009.