SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 23, 2000
The Interpublic Group of Companies, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-6686 13-1024020
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
1271 Avenue of the Americas, New York, New York 10020
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 212-399-8000
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On January 23, 2000, a press release was issued by Interpublic detailing
restructuring charges in connection with the previously announced merger of Lowe
& Partners Worldwide ("Lowe & Partners") and Ammirati Puris Lintas ("APL") to
form an agency network called Lowe Lintas & Partners Worldwide, and is attached
as Exhibit 99.1 and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibits.
99.1 Press Release dated January 23, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Date: January 24, 2000 By: /s/ Nicholas J. Camera
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Nicholas J. Camera
VICE PRESIDENT, GENERAL COUNSEL AND
SECRETARY
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EXHIBIT INDEX
Exhibits.
99.1 Press Release dated January 23, 2000.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
WORLDWIDE ADVERTISING AND MARKETING COMMUNICATIONS
1271 Avenue of the Americas, New York, N.Y. 10020
FOR IMMEDIATE RELEASE
INTERPUBLIC ANNOUNCES RESTRUCTURING CHARGE: FUTURE SAVINGS
EXPECTED TO IMPROVE OPERATIONS
New York, January 23, 2000 (NYSE: IPG) - Philip H. Geier, Chairman and Chief
Executive Officer of The Interpublic Group of Companies, Inc. ("the Company")
announced today that the Company will recognize total after-tax restructuring
charges of between $100 and $115 million in connection with the previously
announced merger of Lowe & Partners Worldwide ("Lowe & Partners") and Ammirati
Puris Lintas ("APL"). It is expected that a significant portion of the total
costs will be recognized in the fourth quarter of 1999, when the restructuring
activities began, with the remainder being recognized over the next several
months.
In October 1999 the Company announced the merger of Lowe & Partners and APL to
form an agency network called Lowe Lintas & Partners Worldwide. This merger has
created a global group with billings of more than $11 billion, which will rank
among the world's top 5 agency groups. The merger, which involves the
consolidation of office operations in Lowe Lintas agencies in over 30 countries
around the world, is well underway. Once complete, the newly merged agency
network will have offices in over 80 countries around the world.
During the fourth quarter of 1999, the company developed a comprehensive
restructuring plan which includes headcount reductions, consolidation of real
estate and sale or disposition of certain investments. The execution of the plan
began in the fourth quarter of 1999 and will be completed within the next
several months. The Company currently estimates that the merger will involve an
overall reduction in headcount of between 800 and 900 out of a total combined
workforce prior to the merger of over 13,000.
The Company expects that approximately half of the total costs will be cash
charges related to the employee severance, lease termination and other costs
incurred in connection with the restructuring. The Company expects a similar
amount of non-cash asset write-offs, primarily related to leasehold improvements
and other tangible and intangible assets, as a result of the restructuring.
The Company expects to benefit from the resulting reduction in employee related
costs, compensation, benefits and space occupancy. These benefits will begin to
be realized in the second half of 2000. It is anticipated that a significant
portion of the savings will be offset by investments in creative talent,
technology and other capabilities to support the acceleration of growth in the
future. The Company anticipates that beginning in 2001 its after-tax results of
operations will benefit by between $20 to $25 million.
The Interpublic Group of Companies, Inc, one of the largest advertising and
marketing communications organizations in the world, is comprised of
McCann-Erickson WorldGroup, The Lowe Group, Western Initiative Media Worldwide,
International Public Relations, Octagon, Zentropy Partners, Allied
Communications Group and other related companies. The shares of The Interpublic
Group of Companies, Inc. are listed on the New York Stock Exchange ("IPG"). For
further information, visit: www.Interpublic.com.
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Contacts: IPG
Sean Orr - 212-399-8093
Thomas J. Volpe - 212-399-8056
