WPP share price: UK Ad Giant Acquires China’s XMKT Group

on Mar 25, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Tuesday, March 25: WPP Plc (LON:WPP), the UK advertising giant, announced today it had agreed to buy XMKT Group, a Chinese marketing services agency. This is WPP’s second acquisition in the People’s Republic this week after the purchase of Shanghai-based premium and gift specialist Egift Design and Production was announced yesterday (WPP share price: Ad giant acquires UK digital technology consultancy).

Meanwhile, in an interview yesterday with CNBC, WPP chief executive officer Martin Sorrell commented on the importance of the Chinese market to the company and said that more acquisitions of Chinese companies are to come in the next couple of weeks.
In today’s trading WPP shares rose 0.15 percent to 1,199.78p as of 8:38 UTC. The company’s stock has fallen 13 percent so far this year.

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**XMKT Group**
According to a WPP statement to the London Stock Exchange, XMKT Group is a marketing services agency specialising in customer experience management. The company, founded in 2010, has four divisions – Events, Retail, Entertainment and Digital. It is headquartered in Shanghai, with offices in Beijing, Guangzhou and Chengdu. XMKT employs about 253 people WPP said. Its key clients include Diageo and Uniqlo.

In 2013 XMKT generated revenues of around $20 million and had gross assets of about $22 million as of December 31.
**China’s importance**

WPP’s acquisition plans in China underline the importance of the country’s market to the UK advertising giant. The People’s Republic represents WPP’s third-largest market globally, which last year generated $1.5 billion of revenue for the company. Yesterday WPP CEO Martin Sorrell talked about the company’s Chinese operations in an interview with the CNBC.

“Our Chinese business is very strong… I often wish that other parts of our business in other parts of the world were as good,” Sorrell said.
He noted that even though the Chinese economy is growing at a slower rate than a couple of years ago, it’s still significantly faster than the growth seen in mature markets such as the US and Europe.
“If we had 7 or 6.5 percent [growth] in the UK we would be over the moon,” Sorrell noted.

Last year, the Chinese economy grew 7.7 percent, compared with 1.9-percent growth in the UK.
Sorrell revealed that for 2014, WPP expects its Chinese operations to perform slightly better than last year, when the company saw an increase in like-for-like sales of six percent. The company projects six to seven percent like-for-like revenue growth in China this year.
**As of 8:38 UTC buy WPP shares at 1200.00p**
**As of 8:38 UTC sell WPP shares at 1199.00p**


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