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Lowe to merge with sister agencies in realignment

NEW YORK - As part of a global realignment, Lowe & Partners Worldwide looks set to merge with a number of other sister agencies to create an enlarged Lowe group, which could be part of a cost-saving exercise for the troubled Interpublic holding company.

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The merger could see agencies, including direct marketing agency DraftWorldwide and the interactive consultancy Zipatoni, moved into what chairman and CEO John Dooner called "close alignment". It would allow Lowe to offer clients services across all marketing disciplines.

Dooner was speaking at an investors meeting in New York. Details will be unveiled by the Interpublic Group of Companies in the next few weeks.

Dooner told investors and media industry executives at the Credit Suisse First Boston conference that clients wanted to know that agencies could deliver multidisciplined marketing programmes. It is likely that such a move could save money for Interpublic, which is struggling with the advertising downturn, as well as the aftershocks of its $181.3m (£115m) accounting scandal.

The new structure could be similar to that of Cordiant Communications, which integrated Bates Advertising, the marketing company 141, the branding and design group Fitch and specialist network Healthworld into one group, called the Bates Group. Although Cordiant said this was to give clients a more seamless service, it is also a cost-cutting strategy for the group.

Lowe Worldwide, Draft WorldWide and Zipatoni are all part of the Interpublic division known as The Partnership. Dooner refused to elaborate on how the realignment of the agencies would work, nor if any other of the agencies in The Partnership would be involved.

Earlier in the week, at the UBS Warburg Media Conference, Dooner and chief financial officer Sean Orr warned that Interpublic's revenues for 2003 were likely to be flat.

Shares in Interpublic closed down by 0.14%, or two cents, at $13.89 yesterday.

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