BlueFocus Communication Group (China)

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BlueFocus Communication Group is China's biggest homegrown marketing services group, and has established a significant presence in Western markets through acquisition. It's primarily a PR group, though some subsidiaries also offer digital marketing, especially in social media, as well as traditional advertising and media investment, event management and other disciplines. Core of the business is PR agency Blue Digital, now partnered by entertainment ad agency Bojie Media (acquired in 2013), interactive advertising agency SNK (acquired 2011) and a local PR joint venture with Dentsu among other units. The group also has outposts in key Western markets, and has strengthened its profile with regional acquisitions including international social media agency We Are Social and US design agency Fuseproject in 2014. In its biggest acquisition to-date, BlueFocus agreed to acquire the North American assets of Vision7 at the end of 2014 for $210m, including advertising agency Cossette and PR network Citizen Relations (in the UK as well as North America). However a 20% stake in UK-based PR group Huntsworth, acquired in 2013, was divested four years later. A deal was announced in 2017 to merge the international assets with US performance marketing platform Fluent to create an expanded marketing services giant still 63% controlled by BlueFocus but publicly quoted in the US. This was eventually abandoned as a result of political concerns over Chinese takeovers of US companies. Instead, in 2019, these international units as well as a couple of smaller Chinese units were demerged into a US-based entity, initially named Blue Impact, but later rebranded as BlueFocus International. This was to be spun out as a separate business but the plan was disrupted by the Covid pandemic. A new spin-off plan was announced in 2021, with the sale of a majority stake in the international division to US and Canadian private equity. Oscar Zhao founded BlueFocus in 1996 in Beijing. It expanded steadily, becoming the country's top homegrown PR agency by 2007. Rather than accept a buyout from Western groups, he floated the group in 2010. He remains chairman & CEO. Brett Marchand, previously head of Vision7, is CEO of BlueFocus International. BlueFocus Communication Group's revenues quadrupled in the four years to 2018, reaching $3.5bn that year. PRovoke estimated PR fee income of $364m in 2020, ranking BlueFocus as the world's 8th biggest PR agency. However that total includes the contribution from Citizen, which is to be spun off in 2021.

Capsule checked 14th July 2021

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Recent stories from Adbrands Update:

Adbrands Daily Update 5th May 2021: Years of uncertainty surrounding the various international agencies acquired by Chinese marketing group BlueFocus may be coming to a close. After the collapse of two earlier spin-outs, a new plan was announced this week whereby Cossette, We Are Social and the other non-Chinese agencies of Vision7 will be acquired jointly by private equity firms CVC Capital Partners and CDPQ of Quebec. No terms for the deal were disclosed. It is expected to close in 3Q 2021.

Adbrands Daily Update 27th Aug 2019: Chinese marketing group BlueFocus announced plans to spin off its non-Chinese subsidiaries - including Canadian agency Cossette, social media network We Are Social and the Citizen Relations PR agency - into a publicly quoted US-based shell company, Legacy Acquisition. The newly created unit will adopt the name Blue Impact, and will continue to be controlled by BlueFocus via a 44% shareholding. Brett Marchand, who had headed BlueFocus's Vision7 North American division since its acquisition, is CEO of the resulting group. The spin-off solves an increasingly difficult problem for BlueFocus, given the troubled economic relationship between the US and China. An earlier attempt to establish a publicly quoted base in the US was blocked last year. BlueFocus had agreed to merge its international assets with locally quoted digital marketing specialist Fluent. However, with a trade war already building in early 2018, the transaction failed to get regulatory approval from the Committee on Foreign Investment in the United States and was abandoned. In addition to BlueFocus's subsidiaries in North America and Europe, Blue Impact will also absorb mainland Chinese mobile platform Madhouse and Hong Kong's Metta marketing agency.

Adbrands Weekly Update 8th Nov 2018: Chinese PR and marketing group BlueFocus - which acquired Canadian powerhouse Cossette a few years ago - made its first North American acquisition for a while with a deal for San Francisco's Eleven. It becomes the group's first ad agency subsidiary in the US.

Adbrands Weekly Update 4th May 2017: Chinese PR group BlueFocus has pulled out of struggling UK counterpart Huntsworth, selling the bulk of its 20% shareholding for a loss, and placing the remaining shares up for sale at a later date.

Adbrands Weekly Update 28th Apr 2016: The Holmes Report published its latest ranking of the world's leading PR agencies by fee income. Edelman easily retained the #1 position, albeit with a slightly reduced margin over second-placed Weber Shandwick, owned by Interpublic. Omnicom's FleishmanHillard and Ketchum held the #3 and #4 positions. WPP's Burson-Marsteller moved up to equal 5th alongside Publicis-owned MSLGroup. However the biggest change was a 37% increase in fee income for China's BlueFocus which jumped five places in the ranking to the #10 spot, unseating Havas PR. Among the holding companies, Omnicom slipped from first to third place by combined estimated fee income, behind Interpublic and WPP.

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