The company will operate as an independent network within the WPP group of companies under the Grey name. In connection with the transaction WPP sought and obtained a new employment agreement from Edward Meyer under which he has agreed to continue as Chairman and CEO of Grey Global Group until at least December 31, 2006. WPP's and Meyer's expectation is that Meyer will join the Board of Directors of WPP after a transition period following the closing of the merger.
In order for the merger to be completed, the merger agreement must be approved by a vote of at least two-thirds of the voting power of all Grey stockholders (with holders of Grey's Class B common shares entitled to ten votes per Class B share) and by a vote of at least two-thirds of the total number of Grey outstanding common shares (with holders of Class B common shares having one vote per Class B share). Meyer has agreed to vote all of his Grey common and Class B shares in favor of the merger, representing approximately 43.5% of the voting power (giving effect to the special voting power of the Class B shares) and approximately 20.5% of the voting power on a per share basis (without giving effect to the special voting power of the Class B shares).
The merger is also subject to other customary closing conditions, including regulatory approval, and is expected to be completed around year-end. The merger does not require WPP shareholder approval.
"We are pleased to join WPP, one of the world's leading advertising and communications firms and a company we have long respected, because of our shared values and strong commitment to superior client service," Meyer said. "Grey's greatest asset is its people, and while the ownership structure will change, our day-to-day business relationship with our clients will remain unchanged and our commitment to do great work will continue to be our passion. By agreeing to combine with WPP, our clients will be able to access a broader array of global services and tools, and our employees can expand their careers in exciting directions."
Meyer continued: "I have spent my entire working career, nearly 50 years, at Grey helping companies build many of the world's greatest brands. I am equally proud of the work I have done to build the Grey brand. I am personally committed to a very smooth integration and to Grey's continuing success."
Commenting on the announcement, Sir Martin Sorrell, Group Chief Executive of WPP said, "The addition of Grey Global Group to WPP will bring a number of benefits to our clients, our people and our shareowners. In addition to broadening our relationship with a number of our leading clients, Grey will bring access to new clients, strengthen our activities in advertising, media investment management, public relations, healthcare and direct and interactive. Additionally, Grey's broad geographic spread will further strengthen WPP's market position. We believe that WPP will offer Grey's clients and its people significant enhanced opportunities. All of us at WPP are excited by the prospect."
