NEW YORK, JUNE 22 -- British advertising giant Saatchi & Saatchi Co. PLC said today it will merge its Dancer Fitzgerald Sample Inc. unit with another U.S. operation to create the world's second-largest agency with worldwide billings of $4 billion.
Dancer, the nation's 13th largest agency, will combine with Saatchi & Saatchi Compton Inc. to form Saatchi & Saatchi DFS Compton, which also will rank No. 2 in the United States, according to Advertising Age rankings.
The new agency will boast a client list of consumer products leaders including Procter & Gamble Co., Johnson and Johnson, RJR Nabisco, General Mills Inc., Sara Lee Corp. and Toyota Motor Corp.
Combined billings in the United States will reach $2.3 billion, while billings from worldwide operations will contribute to a total of more than $4 billion.
Under terms of the merger, Saatchi & Saatchi, which took control of Dancer Fitzgerald in February 1986 for $75 million, will buy Dancer outright, paying another $25 million to Dancer shareholders, consisting of about 150 Dancer executives.
Following the $75 million outlay in 1986, Saatchi merged Dancer with another of its units, London-based Dorland Advertising.
That merger is being dissolved, a Dancer spokeswoman said, so that Dancer can be merged with Saatchi Compton, which is Saatchi & Saatchi's New York-based unit. As a result of the merger, a total of 125 Dancer and Saatchi Compton employes will lose their jobs.
The international operations of the expanded group will be called Saatchi & Saatchi Advertising Worldwide.
Headquartered in New York, Dancer has full-service offices in Minneapolis, San Francisco and suburban Los Angeles. The newly formed agency will be the largest in New York.
"We originally merged with U.K.-based Dorland to build a stronger international network," said Dancer spokeswoman Susan Irwin. The Saatchis later decided that with their Ted Bates Worldwide unit and Saatchi Compton, "they didn't really need another international organization."
Dancer currently employs about 1,000 people in its New York office. With employes drawn from Saatchi Compton, the combined agency will have about 1,350 employes in New York, Irwin said.
Nationally, the new agency will be second to Young & Rubicam, which has $2.4 billion in billings. Dentsu, a Japanese firm, is No. 1 in worldwide rankings, Dancer said.