When scale stops selling: What Dentsu’s aborted global sale signals for advertising’s next phase

Dentsu has spent more than a decade trying to become something Japan’s advertising champion has never quite been: a reliably growing global rival to Publicis, Omnicom and WPP. This week, that ambition looked even shakier after reports that the company’s effort to sell its international operations — a deal meant to draw a line under years of underperformance — is now close to collapsing.

The failed process matters beyond one company because it highlights a harder truth spreading across the agency business: in an era of AI-driven automation, platform power and consolidation, “international scale” is no longer automatically valued. Sometimes, it is viewed as a liability buyers don’t want to inherit.

The problem with Dentsu isn’t one thing — it’s a stack of them

Start with the basic imbalance. Dentsu remains dominant at home, but its international business has repeatedly lagged. The unit that Dentsu put in play — built around the 2012 acquisition of Aegis — generated more than $4.5 billion in net revenues in 2024, yet has been described by would-be buyers as difficult to turn around, with performance trending down.

That underperformance has forced a familiar cycle: restructure, cut costs, promise a reset, then repeat. In August 2025, Dentsu said it would cut more than 3,400 jobs in its international operations as it tried to “rebuild the business foundation” and reassess weaker units.

Investors have heard versions of this before. In its Mid-Term Management Plan for 2025–2027, Dentsu explicitly said it needed to move away from a past “M&A-focused growth strategy” and return to stronger organic growth — an acknowledgement that the acquisition era didn’t deliver what it promised.

And yet, the strategic review itself became another kind of signal: that management and the board were no longer sure they could fix the international arm inside the group.

Why the sale process appears to have fallen apart

According to the Financial Times, trade buyers and at least one private equity suitor stepped away, leaving only one firm still “interested” — and even that interest came with “significant reservations.” The FT also reported that Dentsu’s president and global CEO, Hiroshi Igarashi, had indicated internally that the process had effectively failed, with the company expected to address the outcome around its full-year results.

Dentsu’s own public language has been careful and consistent: it said it was rebuilding and reevaluating underperformers, while “exploring strategic alternatives to enhance corporate value,” but that “no decision has been made.”

Read together, the buyer hesitancy and the company’s statements point to a sobering valuation question: if even a big, established global agency network can’t easily find a buyer for its overseas business, what does that say about the perceived future cash flows of the traditional holding-company model?

What the collapse means for adland

1) A valuation reset for “full-service” international networks.

Potential buyers walking away suggests the market is pricing in more than a cyclical slowdown. It is pricing in structural pressure: automation of some agency labor, clients bringing more work in-house, and platforms and retailers capturing larger shares of marketing budgets. Dentsu’s international unit may be seen as carrying legacy cost and complexity at exactly the moment clients want speed and measurable outcomes.

2) More pressure for consolidation — but also more skepticism about it.

In the past, a troubled network could look like a bargain to a larger one. But even as consolidation remakes the competitive map (Omnicom’s acquisition of Interpublic has already shrunk the club of mega-holdcos), the Dentsu process hints that buying scale is no longer an obviously winning move if that scale is hard to integrate and harder to grow.

Publicis, notably, has publicly played down the appeal of bidding for Dentsu’s international unit, leaning instead on investment in AI-led tools and operating leverage — a strategic contrast that highlights how the industry’s growth narrative is shifting from “bigger” to “smarter.”

3) A new playbook: break-ups, not blockbusters.

If a whole-of-international sale is too messy, the next phase of “strategic alternatives” often becomes more surgical: selling or partnering around specific assets, markets, or capabilities. Dentsu’s international portfolio includes marquee pieces — like Merkle in CXM and data-driven services, and production assets like Tag — that might attract interest even if the full bundle doesn’t. (Whether Dentsu chooses that route is unknown; what’s clear is that buyers have struggled with the all-in version.)

4) A talent-and-client confidence test.

A failed sale can be more destabilizing than a successful one, because it extends uncertainty. The company has already announced major job cuts internationally; if it is now forced to pursue a turnaround alone, it will be doing so under investor scrutiny — including from activists cited in reports — while also trying to reassure clients that service won’t wobble mid-restructure.

Read and watch: When algorithms scale and creativity doesn’t: Advertising’s value crisis

In a company statement, Dentsu said that while there have been media reports regarding its international business, no official announcement has been made and the company remains fully committed to rebuilding its international operations, which it described as a “top priority.”

The bigger takeaway

The Dentsu episode is not just a story about one company’s strategic review gone sideways. It’s an industry referendum on what agency “international businesses” are worth in 2026, when growth is increasingly defined by proprietary data, productized AI systems, and tight integration with commerce and platforms — not by the number of offices on the map.

If the world’s largest ad groups once sold themselves as the safest custodians of global complexity, the market is now asking a colder question: how much of that complexity is an advantage — and how much is simply overhead?