• by Steve McClellan  @mp_mcclellan, November 1, 2012

Japanese marketing services holding company Dentsu has obtained required anti-trust regulatory approvals concerning its $5 billion acquisition of London-based Aegis from every country but one -- China. That’s a critical omission, given recent tensions between the two countries.

There has been speculation that China may be playing politics with the approval process.

A Dentsu rep confirmed Thursday that “with the exception of clearance from China, all other antitrust clearances have been obtained,” including approvals from the U.S., UK, Canada, Russia and several others.

While no one is saying for certain what the holdup is with Chinese approval, some believe it may be linked to an ongoing territorial dispute over several islands in the East China Sea. Reports earlier this week indicated that Japan has privately briefed some allies about the dispute, including the U.S.

When the acquisition was first announced during the summer, Dentsu and Aegis said they hoped to complete the deal by sometime in the fourth quarter. China has now become the wild card with respect to that timing. The Dentsu rep declined to answer a query about whether the parties still believe they expect to complete the deal within that time frame.

The combined companies would make Dentsu the third-ranked agency holding company behind WPP and Publicis in terms of media agency billings, according to a report issued by billings tracker RECMA in July. The deal would also make Dentsu the third-largest agency in China, according to a recent Wall Street Journal report.

WSJ also reported that China’s Ministry of Commerce, the agency scrutinizing the deal there, declined to comment on the approval process.

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