TNS and GfK in Merger Talks

Top five global MR firms TNS and GfK are in discussions about a possible 'merger of equals', which would create the world's second-largest market and information group.

If plans go ahead, the merged business would be renamed GfK-TNS and have a single Board; with TNS CEO David Lowden as CEO, and Hajo Riesenbeck and Donald Brydon, the Chairmen of GfK and TNS respectively, as Co-Chairmen. Its global HQ would be in London, while Nurnberg would be the location for 'a German head office with significant business operations'.

'This is a partnership that would create a global leader across our market sectors bringing new capabilities and value to our clients through the combination of strong syndicated and custom services,' stated Lowden.

Under terms of the proposed merger, shareholders of the two firms would each hold 50% of the combined company. GfK-Verein, GfK's largest shareholder, would be the largest shareholder of the merged group, and so long as it retains at least 15% of the voting capital of the group it will be eligible to appoint one Non-Executive Director to the Board.

Initially this would be GfK's CEO Dr Klaus Wübbenhorst, who commented on the merger discussions: 'The two companies are a perfect fit and have a long and successful track record of working together. I have always believed that a combination would be in the best interests of customers, employees and shareholders.'

A merger would allow the two firms - with combined revenues of $3.9bn in 2007 - to challenge Nielsen, which had sales of $4.7bn; and to spread their specific expertise in the consumer, technology, media and healthcare sectors over an extended geographical area in Asia, Latin America and Eastern Europe. However, some analysts have questioned the geographical 'fit' of the two companies which both have a strong presence in western Europe, currently an area of relatively slow growth.

The merger would also provide operating efficiencies which some are estimating could result in cost savings of around £36m. News of the plan sent shares in TNS up 14% at the opening of trade to 195.05 pence, while GfK shares rose 6% to 28.07 Euros.

Discussions between the two parties are still in progress and the firms have stressed that there is no guarantee that the merger will proceed at this point.

Web sites: www.tns-global.com and www.gfk.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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