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Japanese advertising major Dentsu is exploring a potential sale of its international business, a move that could end its decade-long push to compete globally with rivals like WPP, Publicis, Interpublic, and Omnicom, Financial Times reported.
According to people familiar with the matter, Dentsu has appointed Mitsubishi UFJ Morgan Stanley and Nomura Securities to sound out potential buyers for its creative and media units outside Japan.
The sale, which could fetch several billion dollars, would mark a significant shift for the Tokyo-listed group, which has struggled to establish a foothold overseas despite major acquisitions.
Dentsu made a bold play for global expansion in 2012 by acquiring UK-based Aegis Group for £3.2 billion, one of the largest advertising deals at the time. This helped form the industry's fifth-largest holding company.
The company later expanded with acquisitions such as US-based Merkle and London's Tag Group.
However, the international business has lagged, with revenues hit by tighter client budgets and competition from larger peers. Last year, Dentsu's overseas operations generated more than $4.5 billion in net revenues, but profitability remained elusive, the report added.
In recent months, the Japanese group has lowered its full-year outlook, citing weak performance across Europe, the US, and Asia. It has already announced a restructuring of its international arm, including 3,400 job cuts, and now expects to post an operating loss of ¥3.5 billion ($24 million) this year, compared with an earlier forecast of ¥66 billion in profit.
Hiroshi Igarashi, Dentsu's President and Global CEO, acknowledged that the "international business continues to face negative growth across all regions," FT added.
Sources close to the company said management has grown frustrated with the lossmaking global unit, which has dragged on its otherwise strong domestic business.
Industry insiders warn that the sale decision also reflects broader disruption from artificial intelligence, which threatens to displace traditional creative and media planning roles.
While global competitors are pouring hundreds of millions into AI-driven ad tools, Dentsu risks being squeezed by rivals like Interpublic and Omnicom, which recently announced plans to merge.
Potential buyers reportedly include rival ad firms and private equity groups, though no final decision has been made. Dentsu aims to outline a firm plan by year-end, the report added.
Big-ticket buying decisions now demand more than just logic and product specs – they require trust, emotional connection, and brand stories that resonate.
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