Merger ‘Just Didn’t Seem Opportunistic’ : The Marriage Is Off, 2 Ad Agencies Announce

Just two weeks after their courtship became public, two of Orange County’s biggest ad agencies said Tuesday that they have canceled their plans to merge.

The scheduled marriage of Cochrane Chase, Livingston & Co. of Newport Beach and Backer, Spielvogel Bates Worldwide’s Huntington Beach office would have created one of the largest ad shops in the West, with combined billings of $200 million. Agencies typically book 10% to 15% of billings as revenue.

Hints of the merger first surfaced a few months ago, then were confirmed late last month by Michael Roche, senior vice president and general manager of BSBW. The planned new shop, Backer Spielvogel Bates Inc., would have combined 135 people from Cochrane Chase and about 45 from Backer Spielvogel. Both shops are now wholly owned by London-based Saatchi & Saatchi Co.

Late Tuesday, however, the companies issued a short, cryptic announcement that read: “After studying the possibility of merging, . . . both organizations determined (that) it would be in the best interests of employees and clients of each agency to remain separate.”

The breakup was so unexpected that both offices had already rented space in the same building in Irvine. Roche said Tuesday that both firms still plan to move into the new quarters, but they will be in separate offices.

“When we got through working on all the details, (a merger) just didn’t seem opportunistic,” Roche said. He added that the split-up came “frankly, primarily because of conflicts.”

Cochrane Chase now bills about $10 million from its clients, Southern California Chevrolet Dealers and Dollar Rent A Car, according to Adweek, a trade magazine. Backer, Spielvogel, on the other hand, represents Hyundai and reportedly also handles a $25-million Avis Inc. account.

Even without the marriage, Roche said, “We both would expect to grow.” Apparently not with each other, however.

Cochrane Chase executives could not be reached for comment.