WPP To Sell FGS Global's Majority Stake To KKR

Advertising group, WPP is close to finalising a deal to sell its controlling stake in FGS Global to private equity group KKR for approximately $800 million, according to Financial Times. 

Under the terms of the deal, WPP will divest its 50.5 per cent stake in FGS Global, valuing the communications company at around $1.6 billion. The transaction will see KKR increase its ownership from about 30 per cent to approximately 80 per cent, with the remaining equity held by the company’s partners and management. 

For WPP, the deal is a shift under its newly appointed chairman, Philip Jansen. It provides a boost to WPP's financial position, addressing recent concerns about its relative underperformance compared to rivals. Additionally, it sparks renewed discussion about whether WPP’s share price accurately reflects the combined value of its diverse business units which span media, marketing, PR and advertising globally.

WPP’s move to sell its stake in FGS Global aligns with its strategy to focus more on technology-driven services, utilising artificial intelligence and data analytics to enhance customer targeting and campaign efficiency. The transition observes FGS Global as a non-core asset within WPP’s expansive portfolio.

FGS Global, formed through the merger of Finsbury, Hering Schuppener and Glover Park Group operates nearly 30 offices worldwide, serving over 1,600 clients. The group reported revenue of about $450 million last year, with earnings before interest, tax, depreciation, and amortisation (EBITDA) of around $95 million.