Nizan Guanes Sells the ABC Group

The Brazilian company, the ABC Group, was founded by Nizan Guanaes and Joao Valente in 2002 with a specific goal of becoming the largest advertising group in the world. Although it may not be the largest today, it is among the biggest and best with 14 companies, and by far the largest in Brazil. Some of these companies by themselves are among the largest advertising companies in the country. The group was recently purchased by Omnicom, the second largest communications conglomerate in the world. This revealed the truth of rumors that have been going around for months about ABC being put up for sale, rumors that Guanaes adamantly denied.

The transaction was finalized after six months of grueling negotiations with a final price of around $1 billion. As part of the deal, Guanaes and Valente will also be joining the Omnicom team. Acquiring ABC Group is definitely a smart financial move for Omnicron. The strategic event will successfully remove from financial opposition one of their two major competitors. Last year it also merged with Publicis, its other major competitor. It is not surprising to insiders that ABC should be bought out by Omncron, and U.S. conglomerate.

Most of the large companies in Brazil are today owned by international conglomerates. This makes sense other than absorbing more financial profit possibilities. It’s also practical since most of the big conglomerates like to work internationally. It just makes sense to work in a country through an absorbed company that is native to the country. Such absorption will also usually benefit the absorbed company because the larger company absorbing them will be able to afford better information technology, equipment, and databases. It is also not surprising that since Brazil has the best advertising industry in the world, international conglomerates should target them for such absorption.

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