• by David Kaplan , January 25, 2005

After a standard delay in its attempt to buy Grey Global Group for $1.5 billion, British ad holding company WPP Group has been given the nod by the European Commission, the antitrust regulating arm of the 25-nation European Union in Brussels.

The commission considered whether the deal between the American Grey and the British WPP would have hurt competition, especially in the area of media buying, an EC statement said. It ruled that there are enough rivals to WPP's MindShare and Mediaedge:cia and Grey Global's MediaCom to ensure a competitive market, particularly in Germany.

"After detailed analysis, the commission has concluded that the merger would not significantly impede effective competition," the commission said in a statement. The purchase of Grey Global--a New York-based advertising company whose clients include Procter & Gamble and GlaxoSmithKline--will narrow the competitive divide between London-based WPP and Omnicom Group Inc., the world's biggest advertising company.

Grey will boost WPP's revenue by about 20 percent, WPP said in September, and combined revenue last year would have been $9.2 billion (4.9 billion pounds).

Grey's MediaCom media-buying company clients also include Time Warner and Royal Dutch/Shell Group. WPP's MindShare runs media for companies such as electronics giant Samsung and packaged goods marketer Unilever. From the outset, WPP beat offers from Paris-based Havas and buyout firm Hellman & Friedman for Grey.

Ed Meyer, Grey's CEO, stands to make some $350 million on the deal, and will remain part of the merged company for two years.