• by Steve McClellan  @mp_mcclellan, March 25, 2013

Two weeks ago, Dentsu said its acquisition of London-based Aegis Group would be completed by March 26, assuming the completion of remaining regulatory steps. Those steps are proceeding apace, and an Aegis rep confirmed today that the deal is expected to close after a final UK Court Hearing Tuesday.

However, one key hurdle remains before the companies fully execute the integration plan they have been working on since announcing the agreement last year -- approval of the deal by China.

Dentsu confirmed Friday that the Chinese regulatory body known as MOFCOM has not yet signed off on the merger as the company takes the final steps necessary to complete the transaction. Dentsu said that given its “respect” for the rules of the People’s Republic of China, it would hold off taking “management control” and “implementing the integration of Aegis,” until Chinese approval was received.

It appears that Dentsu is trying to be as tactful as possible with the one government that has not supplied the necessary approvals, while the company proceeds with the closing of the transaction. China’s blessing is important --  the combined entity would be one of the largest agencies operating in the country.

Dentsu gave no indication of when Chinese approval might be forthcoming, and said it would have “no further comment on this matter” until approval had been received.

Dentsu agreed to purchase Aegis for approximately $5 billion last July. 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 when the merger was announced.

When the deal was first struck, the companies had hoped to complete it before the end of 2012. But when it became clear last fall that Chinese approval would take longer than anticipated, the closing date was pushed back to February and then to March of this year.

The companies haven’t cited specific reasons for the holdup on the Chinese end.  Earlier reports tied it to a territorial dispute between Japan and China over several islands in the South China Sea.