• by Joe Mandese , November 17, 2005

In a development that once again redirects the strategic direction of the operator of the world's largest marketing and media research businesses, Dutch holding company VNU Thursday officially terminated its $7 billion acquisition of IMS Health, and announced plans to replace its CEO. The IMS deal, which sparked a shareholder revolt, would have transformed VNU, pushing it much deeper into the burgeoning world healthcare market--but was killed after shareholders representing nearly half of VNU's stock voted it down.

As part of the termination agreement, VNU agreed to pay IMS $15 million, plus an additional $45 million, if VNU is acquired within the next 12 months. IMS agreed to pay VNU $15 million if IMS is acquired within the next 12 months.

But the dissolution of the deal, which was championed by VNU Chairman-CEO Rob van den Bergh, triggers a restructuring of VNU, including new "cost-management initiatives," which come at a time when VNU is embarking on some costly expansion and new product development efforts--including its Project Apollo initiative with Arbitron, as well as the introduction of new Nielsen Media Research products and systems. In addition to Nielsen Media Research and ACNielsen, VNU is a major publisher of trade magazines such as Adweek, Billboard, and The Hollywood Reporter.

One immediate casualty of the deal is van den Bergh, who said he was stepping down after more than 25 years with the company. He said that he would remain CEO until a supervisory board has completed a search for a successor, which will begin shortly.

Prior to the announcement of its merger agreement with IMS Health in July, VNU was seen as a cash-rich company that might acquire other marketing and media research companies, and there was also speculation that it might look to consolidate the media research field--possibly making a bid to acquire Arbitron, a publicly traded company that it has two potential joint ventures with.

This week, VNU's Nielsen unit said it accelerated its due diligence process, and planned to make a decision soon on whether to move forward on a joint venture with Arbitron to roll out a TV and radio ratings system based on Arbitron's portable people meters.