VNU Chief to Quit as IMS Merger Called Off

VNU's CEO Rob van den Bergh is stepping down, following the announcement that the company's planned takeover of IMS Health has been terminated due to strong resistance from VNU shareholders. Under the termination agreement, VNU will reimburse IMS $15 million for out-of-pocket costs.

Van den Bergh has decided, in consultation with the company's Supervisory Board, to step down as CEO after 25 years with the company. He describes the move as very difficult, but says it is 'the appropriate decision'. He has agreed to stay in position until the Supervisory Board finds a successor.

The CEO says he believed there was 'a compelling business rationale' for combining the two companies, and that the merger would have increased shareholder value in the longer term. However, the merger required approval from a majority of shareholders, and a group claiming to represent 50% of the company's shares stated that they would not accept the deal under any circumstances.

In addition to the $15m payment, VNU will pay $45m to IMS should VNU itself be acquired in the next 12 months. IMS will pay VNU $15m if IMS is acquired in the next 12 months.

David Carlucci, CEO and President of IMS Health states that he regrets that the merger will not happen, but that IMS Health's business remains strong. He adds: 'To provide additional insights on consumer behavior, we're pleased to have gained agreement with VNU to continue working together to develop and pursue the many joint revenue opportunities that came out of our integration planning efforts.'

VNU says it will now focus on accelerating the profits of its existing businesses and maximising shareholder value. It plans to return approximately 1 billion Euros to shareholders, on top of the regular dividend, to expand current cost-management initiatives, and to pursue a listing on the New York Stock Exchange.

Rob Ruijter, VNU's CFO, states: 'There are more opportunities for us to drive greater efficiency and productivity across the entire company by building on current initiatives, particularly in the IT space.' The company will provide more details about cost-saving targets and initiatives by March 8, 2006, when it will announce its 2005 financial results.

Van den Bergh also remains positive about the company's future: 'Although there are challenges ahead, I believe the future is very bright for VNU, as demand for its specialised information and insights continues to grow'.

As for IMS Health, Carlucci says the company is 'focused on building value for shareholders', and remains comfortable with its full-year guidance of 10 to 12% constant-dollar revenue growth, and full-year, adjusted earnings per share of $1.32 to $1.35.

The companies are online at www.vnu.com and www.imshealth.com.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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