Agency.Com-Eagle River Merger Creates a Giant

Agency.com is merging with Eagle River Interactive to form the world’s largest interactive agency.

The new company will retain the Agency.com name, and will have projected 1998 revenues of $80 million. Financial terms of the deal were not disclosed.

Headquartered in New York, the company will have more than 575 employees with offices in Avon, CO, Boston, Chicago, Dallas, Portland, OR, San Francisco, Wellesley, MA and Woodbridge, NJ in the U.S., as well as offices in London and Paris.

The new enterprise will combine the strategy and creative expertise of Agency.com with the business and technology solutions capabilities of Eagle River Interactive, the companies said.

Chan Suh will continue as CEO of Agency.com; Kevin Rowe, president of Eagle River Interactive, will become president of Agency.com North America.

But the big winner may be Omnicom Group, the huge advertising agency holding company, which has taken stakes in several of the most prominent start-up interactive agencies.

Omnicom owns 40 percent of Agency.com and all of Chicago-based Eagle River Interactive, based in Chicago. The terms of the deal have not been disclosed, but Omnicom’s stake in Agency.com will increase to just under half as a result of the deal, Suh told the New York Times.

“There are significant synergies between these two organizations, both geographic and in terms of expertise,” said John Wren, Omnicom CEO in a statement. “Their merger creates a powerful new force in the industry, capable of delivering world-class interactive services to global companies.”

“By merging with Eagle River Interactive, we have the opportunity to set a new standard in the interactive industry for quality, resources and global reach,” said Suh. “It completes our multi-disciplinary expertise and allows us to provide unrivalled end-to-end interactive solutions for our clients–from high-level strategic consulting to cutting-edge e-commerce and back-end systems.”

“In combining our organizations, we intend to create a fully integrated company that brings together our complementary skill sets and competencies,” said Eagle River’s Rowe. “We will be able to serve our customers locally, while sharing the resources, knowledge and best practices of our global network.”

In recent months, Agency.com also bought Online Magic in London, Spiral Media in New York and Interactive Solutions in Boston. The latter two were also owned by Omnicom.

Eagle River clients include Disneyland Paris, Comerica Bank, Compaq, First Chicago, Ford, Freightliner, Hewlett-Packard, IBM, Motorola, Pfizer, Prudential, Sharp, Sprint, Sun Microsystems and USWest.

Agency.com clients include American Express, British Airways, BT, General Motors, Glaxo Wellcome, Harvard Pilgrim Health Care, Hewlett-Packard, Hitachi America, Lucent Technologies, MetLife, Nationwide Insurance, Nickelodeon, Prudential, Reuters, Unilever and Xerox.